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Bridging the Gulf

Sen. Eric Lesser

Sen. Eric Lesser

Since first elected to office five years ago, state Sen. Eric Lesser has made economic development and, more specifically, closing the wide gap in prosperity between the eastern and western areas of the state his top priority. While he’s most closely linked to high-speed rail, he’s put his name — and energy — behind a number of initiatives to bring more jobs and more vibrancy to the 413.

As he talks about economic development in the Bay State, Eric Lesser focuses on most of the usual subjects — jobs, wages, taxes, incentives, industry clusters, training, and technology. But the issue he’s really obsessed with is geography.

To be more specific, it’s the economic gulf that exists between east — meaning Greater Boston — and west in a state that’s only 120 miles wide. It’s a huge gulf, and since he was first elected to the state Senate in 2014, Lesser has devoted most of his waking hours to somehow closing it and enabling the four western counties to look and feel more like those east of Worcester, at least from a jobs and overall vibrancy perspective.

This broad goal has been the inspiration for dozens of bills and initiatives, ranging from high-speed rail service that would connect Boston and Springfield to more recent endeavors such as legislation that would pay $10,000 to individuals willing to move to Western Mass. and work remotely, and another bill that would funnel $87 million in incentives that General Electric is essentially refunding to the state toward vocational education programs.

But in each case, Lesser told BusinessWest, the bills were filed not to benefit Western Mass. exclusively, but the state as a whole, said Lesser, chair of the Legislature’s Manufacturing Caucus and also its Gateway Cities Caucus.

“This challenge we have is actually a huge opportunity, because we have a lot of assets; we’ve got great cultural institutions, we’ve got great academic institutions, we’re really close to red-hot economic centers in New York to our south and Boston to our east. We have to take full advantage of this opportunity.”

“Boston has an endless supply of fast-growing, high-paying jobs,” he told BusinessWest. “What it doesn’t have is enough open space, enough affordable housing, and a transportation system that can sustain all this. So my philosophy for the past five years has been to work on policies that address the needs of both ends of the state.”

As an example, he cited the issue he is perhaps most closely associated with — high-speed rail service, again the focus of ongoing study. Lesser said there is a good reason for his preoccupation with rail — actually several of them.

Indeed, both research and recent events show there a strong relationship between rail service and seizing opportunities within the broad realm of economic development, he said, citing several once-struggling cities within the Commonwealth as examples.

“The Wall Street Journal did a detailed report on this about a year and a half ago,” he explained. “They looked at Lowell, Lawrence, Worcester, and Springfield and determined that recovery from the Great Recession was greatest in those gateway cities that were connected by rail service.

“Why? Because they were able to take advantage of the overheating of the economy in Boston — people were moving out of the city to find more affordable places to live, and they could do that because of the rail connection,” he went on. “Rail will give people in Western Mass. access to high-paying jobs that will grow our economy by producing and fueling the construction industry, among others. And it gives Eastern Mass. access to more open space and more affordable housing, which are desperately needed priorities.”

Likewise, the legislation involving incentives to move west would help this region because it would bring more young professionals with buying power to the area, but it would also help the Greater Boston area by giving remote workers for companies based there a more affordable option for living in the Bay State.

Overall, the energetic Lesser is committed to helping this region not only regain some of the prominence it enjoyed when it was a center for precision manufacturing and had tens of thousands of people working in that sector at the Springfield Armory and several private companies, but thrive in a modern, technology-driven economy fueled by innovation and entrepreneurship.

Eric Lesser says a strong precision-manufacturing sector

Eric Lesser says a strong precision-manufacturing sector is one of the region’s many assets, and one that should be leveraged in the years and decades to come.

And as he goes about that assignment, he sees a number of links between the past and the future.

Indeed, when one of the young entrepreneurs speaking at the State of Entrepreneurship event staged last month at Valley Venture Mentors opined that Western Mass. could be the next Silicon Valley, Lesser, when it was his turn to talk, said this region was Silicon Valley not so long ago, at least in terms of industrial innovation and ‘firsts’ — everything from the Blanchard lathe to the monkey wrench — due to a strong culture of entrepreneurship.

It is becoming that again, but has a ways to go, he told BusinessWest, specifically when asked if this region could become home to many of the large corporations now based in and around Boston.

“The single biggest challenge is workforce,” he said. “Companies need a a mix of workers, and they need a supply of workers that can do what they need done; we’re not there yet.”

Overall, to play a more prominent role in today’s IT-driven economy, this region needs some help in the broad and critical realm of connectivity, he went on, adding that this help could come in the form of a high-speed rail connection, funding to help vocational high schools reduce or eliminate their waiting lists for some programs, and, yes, even incentives for individuals to relocate here.

“This challenge we have is actually a huge opportunity,” he said, “because we have a lot of assets; we’ve got great cultural institutions, we’ve got great academic institutions, we’re really close to red-hot economic centers in New York to our south and Boston to our east. We have to take full advantage of this opportunity.”

For this issue, BusinessWest talked at length with Lesser about how his primary focus since being elected to office is doing just that.

State of the Economy

As he talked about the gulf that exists between east and west, Lesser, whose district includes roughly half of Springfield, more than half of Chicopee, and several smaller towns east of Springfield, provided a quick history lesson in how things came to be this way.

“In the 1980s, we had a manufacturing-oriented economy here that emptied out over the course of the 20 or 30 years since then,” he explained, referencing the closing, relocation, or downsizing of stalwarts such as American Bosch, Chapman Valve, Westinghouse, Monsanto, and others. “Those companies used to employ thousands each, and most of those still lie empty. Boston and Eastern Mass. had the same phenomenon — in fact, the whole country saw it; there were major manufacturing centers in the Boston area that also emptied out.

“The difference and the challenge we have is that, in the Boston area, those jobs were replaced by jobs in high tech, education, healthcare, the so-called eds and meds, as they say,” he went on. “We had some of the replacement in Western Mass., but nowhere near as much or at the same rate as Eastern Mass.”

And while jobs have left, so too have people.

Lesser noted that Holyoke, in its heyday as a paper and textiles mecca, had a population of close to 60,000; today it’s around 40,000. Springfield once had 190,000 residents; today the number is closer to 160,000. And while the populations are getting smaller, they’re also getting older, and it’s not just the urban centers.

“They’re talking about closing schools in communities all across my district — in Granby, in Wilbraham-Hampden, even in Longmeadow, where they’re talking about closing one of the two middle schools,” he told BusinessWest, adding that these smaller, aging populations are reaching a critical stage.

“If we don’t do big creative things to reverse this challenge that we face, then we’re going to be in big trouble,” he said, emphasizing that adjective. “We’ve got to bring in new ideas, be aggressive about trying new concepts, and work with what we have, which is great people, a great legacy of innovation, and great quality of life.”

And Lesser has brought forth a number of new ideas since first elected, many of them focused on replacing the jobs that have been lost in this region, drawing more young people to the 413, and building the entrepreneurial ecosystem in the Valley.

He wants to replace jobs lost by bolstering the region’s already-strong manufacturing sector with education and training programs aimed at retaining jobs and adding new ones. And at the same time, he wants to build a stronger workforce in this region — one that will eventually attract more employers — by making it easier to work for the companies in and around Boston, but live here.

Which brings us back to high-speed rail.

The matter has been studied, but Lesser fought hard for and eventually helped win funding to get it studied again. He’s confident that the study will reveal what he firmly believes — that such rail service is a worthy investment for the Commonwealth because of the benefits that will come from bringing Greater Boston and Greater Springfield closer together, figuratively speaking.

Eric Lesser, seen here at a recent roundtable

Eric Lesser, seen here at a recent roundtable with manufacturing and vocational-education leaders, says the state must do something to ease the long waiting lists for vocational programs.

“Rents are out of control in Boston, the traffic is asphyxiating, they need relief from that, and we offer that in Western Mass.,” he explained, adding quickly that he does not believe Boston-area prices will come to the 413, as they have in parts of Rhode Island and other regions of this state.

“We’re a long way from that being the challenge,” he said. “I’m sensitive to that, and we have to stay on top of that. If you focus on things like transit-oriented development — clustering development around Union Station, for example, and redeveloping mill properties and vacant home units — you can do this in a sustainable way that lifts all boats.”

Making Progress

As he referenced the region’s proud history as an advanced-manufacturing hub, Lesser said this sector remains one of its strengths. However, its status is threatened by a number of sustainability challenges, especially when it comes to the workforce.

“Right now, in the Pioneer Valley, you have thousands of vacant positions in advanced manufacturing,” he noted. “And the reason they’re vacant is because you have wait lists at all our voke schools; they can’t produce graduates fast enough to keep up with the growth.

“This is a golden opportunity for us to grow the economy if we can target the state investments toward closing those voke-ed and career and technical education waiting lists,” he went on, referring to his legislation related to the GE incentives being refunded to the state. “You’re going to get more people out the door into jobs, working good jobs that pay $25 to $30 an hour entry level for an 18- or 19-year-old with no college debt. And if we don’t do that, how long is a company going to sit around with vacancies on their books? They’re going to move to North Carolina, Texas, Eastern Mass., or upstate New York, where they’re going to find the workers.”

Thus, the legislation regarding those GE incentives, filed just last month, is an example of that creative, aggressive thinking that Lesser mentioned earlier, and an example of initiatives aimed at benefiting not just Western Mass., but the state as a whole.

It’s a measure that triggered a discussion about the prudence of granting large incentives for relocation to companies like GE, when, in Lesser’s opinion, there are plenty of better ways to invest those tens of millions of dollars.

“The idea behind that money was to create jobs,” referring to the more than $150 million awarded to GE as an incentive to move from Connecticut to Boston and invest in new facilities there. “But it was creating almost entirely high-paying, white-collar jobs in an area of the state that is already producing a lot of high-paying, white-collar jobs. We desperately need middle-class jobs in all the regions outside of Boston, which already has a red-hot economy.

“So the idea here is to direct the money to vocational and CTE programs to do things like purchase more equipment, outfit more classrooms, and hire more teachers,” he went on. “You’re going to reduce that backlog, get students off the wait list, and get them slotted right away into jobs with local employers that are already here.”

He said the measure has garnered a considerable amount of support since it was filed, and from across the state — not surprising given the priority placed on training workers for the manufacturing sector by both the Manufacturing Caucus and the Gateway Cities Caucus and efforts to get more CTE funding.

Such efforts have been going on for years, and the momentum created by such efforts, as well as changing views about granting incentives to large corporations that often don’t bring all the jobs they promise or want too much in exchange for them, may be prompting some rethinking when it comes to how this state might invest in economic development.

“If we don’t do big creative things to reverse this challenge that we face, then we’re going to be in big trouble. We’ve got to bring in new ideas, be aggressive about trying new concepts, and work with what we have, which is great people, a great legacy of innovation, and great quality of life.”

“The state is willing to shell out, with such enthusiasm, a massive tax writeoff to a huge corporation that may or may not keep that money in Massachusetts — and in fact is more likely to distribute it to its shareholders, who live all over the world,” Lesser said. “Now, this becomes a test to see if the state is committed to middle-class job creation outside of already-hot markets. How committed are we to creating jobs in Springfield, Holyoke, and Pittsfield?”

While awaiting an answer to that question, Lesser will also see if there is sufficient support for legislation that has come to be called his ‘go west’ bill, one that would award $10,000 to individuals willing to relocate to Western Mass. and work remotely.

It was sparked, he said, by both the ongoing and accelerating trend toward professionals working remotely, and also those alarming demographic trends cited earlier involving populations getting smaller and older. Instead, he wants them to get larger and younger.

“There’s a big trend globally regarding remote working, especially companies based in San Francisco, Boston, or New York,” he explained. “They’re facing sky-high commercial real-estate prices, so they’re under immense pressure to shrink their office footprints in those cities. So you can see a scenario where a bank based in New York wants to shrink its rent footprint in Manhattan; it can offer an incentive to its workers that can be matched with our incentive. Those workers can move here, buy homes here, send their kids to school here, shop here, and pay taxes here.”

Lesser enthusiastically points to an analysis of that bill authored by Hans Despain, chair of the Economics department at Nichols College, who praised Lesser’s focus on remote jobs, especially those in the FIRE (finance, insurance, and real estate) sector, and projected a benefit to the region of $60,000 for each individual who goes west.

“The first thing to underscore is that this is quite literally a jobs bill,” Despain wrote in an op-ed in the Republican. “For example, for each new citizen who relocates to Holyoke, she brings with her a job that previously did not exist in the area.”

Connecting the Dots

When asked about whether energies should be put toward incentivizing the next GE — if there is one — to locate in the western part of the state or another still-struggling region like the New Bedford area, Lesser reiterated his contention that Greater Springfield simply couldn’t contend for such a prize at this moment in its history — for the very reasons that have prompted all those measures that have come off his desk.

“We can’t bring a GE here until we make the investments, until we make the decisions we have to make that have, quite frankly, been kicked down the road far too long,” he told BusinessWest. “We need to invest in connectivity; we need the rail service. We need to continue to invest in our workforce and our local communities so we’re producing the skilled workers who can work at those companies.

“And I’m very confident that a GE or an Amazon could come here,” he went on. “But I’m more interested in the kid at Chicopee Comp who thinks up the next GE and decides to locate it here and grow it here rather than packing up and moving it to Boston or San Francisco.”

That can only happen if there’s a workforce, and if the gulf between east and west can be bridged. These are the hard facts that drive Lesser as he tries to engineer a solution to this long-standing problem.

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

Education

The Face of a Changing Landscape

Hampshire College President Miriam Nelson

Hampshire College President Miriam Nelson

As high-school graduating classes continue to get smaller and the competition for those intensifies, many smaller independent colleges are finding themselves fighting for their very survival. One of them is Hampshire College in Amherst, which, because of its unique mission, alternative style, and famous alums (including Ken Burns), has in many ways become the face of a growing crisis.

Miriam Nelson says she became a candidate to become the seventh president of Hampshire College — and accepted the job when it was offered to her last April — with her eyes wide open, fully aware of the challenges facing that Amherst-based institution and others like it — not that there are many quite like Hampshire.

Then she clarified those comments a little. She said she knew the school was struggling with enrollment and therefore facing financial challenges — again, as many smaller independent schools were and still are. But she didn’t know just how bad things were going to get — and how soon.

She became aware through a phone call on May 2 from the man she would succeed as president of the school, Jonathan Lash.

“He let me know that our target number for enrollment this year was significantly lower than what was expected; I think he knew, and I knew, at that time that my job this year was going to be different than what I’d planned,” she recalled, with a discernable amount of understatement in her voice.

Indeed, with that phone call — and the ensuing fight for its very survival — Hampshire became, in many ways, the face of a changing landscape in higher education, at least in the Northeast.

That’s partly because of the school’s unique mission, alternative style, and notable alums such as documentary filmmaker Ken Burns. But also because of heavy media coverage — the New York Times visited the campus earlier this month, one of many outlets to make the trip to South Amherst — and the fact that the school is really the first to carry on such a fight in an open, transparent way.

In some ways, Hampshire is unique; again, it has a high profile, and it has had some national and even international news-making controversies in recent years, including a decision by school leaders to take down the American flag on campus shortly after the 2016 election, while students and faculty members at the college discussed and confronted “deeply held beliefs about what the flag represents to the members of our campus community,” a move that led veterans’ groups to protest, some Hampshire students to transfer out, and prospective students to look elsewhere.

But in most respects, Hampshire is typical of the schools now facing an uncertain future, said Barbara Brittingham, president of the New England Commission of Higher Education (NECHE), adding that those fitting the profile are smaller independent schools with high price tags (tuition, room, and board at Hampshire is $65,000), comparatively small endowments, and student bodies made up largely, if not exclusively, of recent high-school graduates.

That’s because high-school graduating classes have been getting smaller over the past several years, and the trend will only continue and even worsen, said Brittingham, citing a number of recent demographic reports.

Meanwhile, all schools are confronting an environment where there is rising concern about student debt and an increased focus on career-oriented degrees, another extreme challenge at Hampshire, where traditional majors do not exist.

“He let me know that our target number for enrollment this year was significantly lower than what was expected; I think he knew, and I knew, at that time that my job this year was going to be different than what I’d planned.”

None of these changes to the landscape came about suddenly or without warning, said Brittingham, noting that the storm clouds could be seen on the horizon years ago. Proactive schools have taken a variety of steps, from a greater emphasis on student success to hiring consultants to help with recruiting and enrollment management.

But for some, including several schools in New England, continued independence and survival in their original state was simply not possible. Some have closed — perhaps the most notable being Mount Ida College in Newton, which shut down abruptly two months before commencement last spring — while others have entered into partnerships, a loose term that can have a number of meanings.

In some cases, it has meant an effective merger, as has been the case with Wheelock College and Boston University and also the Boston Conservatory and the Berklee College of Music, but in others, it was much more of a real-estate acquisition, as it was with Mount Ida, bought by UMass Amherst.

What lies ahead for Hampshire College is not known, and skepticism abounds, especially after the school made the hard decision not to admit a full class for the fall of 2019. But Nelson remains optimistic.

An aerial photo of the Hampshire College campus

An aerial photo of the Hampshire College campus, which has been in the national media spotlight since it was announced that the school was looking to forge a partnership with another school in order to continue operations.

“Hampshire has always been innovative, and we’re going to do this the ‘Hampshire way,’” she said during an interview in the president’s off-campus residence because her office on the campus was occupied by protesting students. “We’re thinking about our future and making sure that we’re as innovative as we were founded to be. We need to make sure that our financial model matches our educational model.”

For this issue and its focus on education, BusinessWest talked with Nelson and Brittingham about the situation at Hampshire and the changing environment in higher education, and how the school in South Amherst has become the face of an ongoing problem.

New-school Thinking

Those looking for signs indicating just how serious the situation is getting within the higher-education universe saw another one earlier this month when Massachusetts Gov. Charlie Baker filed legislation to strengthen the state’s ability to monitor the financial health of private colleges.

“Our legislation will strengthen this crucial component of our economy, but most importantly, it will help protect students and their families from an abrupt closure that could significantly impact their lives,” Baker said in a statement that was a clear reference to the Mount Ida fiasco.

The bill applies to any college in Massachusetts that “has any known liabilities or risks which may result in imminent closure of the institution or jeopardize the institution’s ability to fulfill its obligations to current and admitted students.”

And that’s a constituency that could get larger in the years and decades to come, said Brittingham, adding that demographic trends, as she noted, certainly do not bode well for small, independent schools populated by recent high-school graduates.

She cited research conducted by Nathan Grawe, author of Demographics and the Demand for Higher Education, which shows that, in the wake of the Great Recession that started roughly 11 years ago, many families made a conscious decision to have fewer children, which means the high-school graduating classes in the middle and end of the next decade will be smaller.

“Things are going to get worse around 2026,” she said. “The decline that is there now will only get more dramatic, especially in New England.”

As noted earlier, Nelson understood the landscape in higher education was changing when she decided to pursue a college presidency, and eventually the one at Hampshire, after a lengthy stint at Tufts and then at the University of New Hampshire as director of its Sustainability Institute.

She told BusinessWest that Hampshire offered the setting — and the challenge — she was looking for.

“Hampshire was the one where I thought there was the most opportunity, and the school that was most aligned with more core values and my interests,” she explained, adding that she was recruited by Lash for the post. “This school has always been inquiry-based, and I always like to start with a question mark. To be at Hampshire means you have to have imagination and you have to be able to handle ambiguity when you have an uncertain future; that’s one of the hallmarks here at Hampshire.”

Imagination is just one of the qualities that will be needed to help secure a solid future for the school, she acknowledged, adding that, while the current situation would be considered an extreme, the college has been operating in challenging fiscal conditions almost from the day it opened in 1970 — and even before that.

“We started out under-resourced, and we’ve had different moments during almost every president’s tenure where there were serious concerns about whether the college could continue,” she said. “We’ve always been lean, but we’ve managed.”

Barbara Brittingham

Barbara Brittingham

“Things are going to get worse around 2026. The decline that is there now will only get more dramatic, especially in New England.”

However, this relatively thin ice that the college has operated on became even thinner with the changing environment over the past several years, a climate Nelson put in its proper perspective.

“Higher education is witnessing one of the most disruptive times in history, with decreasing demographics, increased competition for lower-priced educational offerings, and families demanding return on investment in a college education in a short period of time,” she told BusinessWest. “There’s a lot of factors involved with this; it is a crisis point.”

A crisis that has forced the college to reach several difficult decisions, ranging from layoffs — several, effective April 19, were announced last month involving employees in the Admissions and Advancement offices — to the size and nature of the incoming class.

Indeed, due to the school’s precarious financial situation — and perhaps in anticipation of the governor’s press for greater safeguards against another Mount Ida-like closing, Hampshire has decided to admit only those students who accepted the school’s offer to enroll via early admission and those who accepted Hampshire’s offer to enroll last year but chose to take a gap year and matriculate in the fall of 2019.

Nelson explained why, again, in her most recent update to the Hampshire community, posted on the school’s website, writing that “our projected deficit is so great as we look out over the next few years, we couldn’t ethically admit a full class because we weren’t confident we could teach them through to graduation. Not only would we leave those students stranded — without the potential for the undergraduate degree they were promised when they accepted Hampshire — we would also be at risk of going on probation with our accreditors.”

Hampshire College is just one of many smaller independent schools

Hampshire College is just one of many smaller independent schools challenged by shrinking high-school graduating classes and escalating competition for those students.

While reaching those decisions, leaders at the college have also been working toward a workable solution, a partnership of some kind that will enable the school to maintain its mission and character.

Ongoing work to reach that goal has been rewarding on some levels, but quite difficult on all others because of the very public nature of this exercise, said Nelson, adding that her first eight months on the job have obviously been challenging personally.

She said the campus community never really got to know her before she was essentially forced into crisis management.

And now, the already-tenuous situation has been compounded by negativism, criticism (Nelson has reportedly been threatened with a vote of no confidence from the faculty), and rumors.

“There’s a lot of chaos and false narratives out there,” she explained. “So I’ve been working really hard both in print and in many assemblies and meetings to get accurate information out. This is a world with lots of false narratives and conspiracy theories; we heard another one yesterday — they’re really creative and interesting. I don’t know how people think them up.”

Textbook Case?

As she talked about the ongoing process of finding a partnership and some kind of future for Hampshire College, Nelson said she’s received a number of phone calls offering suggestions, support, and forms of encouragement as she goes about her work in a very public way.

One such call was from a representative of the Mellon Foundation.

“He said he’s never seen a college do this in a transparent way like we are,” she said. “He’s right, and when you’re doing it in real time, and transparently, it’s going to be clunky; it’s not like you’ve got every detail worked out and figured out right at the very beginning. We’re doing the figuring out in a public way and engaging with the community and our alums and the broader community and the higher-ed community as we do this.

“It’s a very different way to do it, and no one has ever done it; it is a very Hampshire way,” she went on. “But that makes it really hard, and I can see why every other president who has been in this place has not done this in an open way. I understand it.”

Miriam Nelson

Miriam Nelson says Hampshire College is determining the next stage in its history in real time, which means the process will be “clunky.”

Elaborating, she said there are no textbooks that show schools and their leaders how to navigate a situation like this, and thus she’s relying heavily on her board (in the past, it met every quarter; now it meets every week), the faculty, students, and other college presidents as she goes about trying to find a workable solution.

And there are some to be found, said Brittingham, adding that several effective partnerships have been forged in recent years that have enabled both private and public schools to remain open.

Perhaps the most noted recent example is Wheelock and Boston University, although it came about before matters reached a crisis level.

“Wheelock looked ahead and felt that, while they were OK at that moment, given the trends, given their resources, and given their mission, over time, they were going to be increasingly challenged,” she explained. “So they decided that sooner, rather than later, they should look for a partner, which turned out to be Boston University, which Wheelock essentially merged into.

“That’s seen as a good arrangement, it was handled well, and they were able to preserve the name of the founder in the Wheelock College of Education and Human Development at Boston University,” she went on. “They were able to transition a large number of faculty and staff to Boston University, it was geographically close … it’s been a smooth transition.”

Another partnership that fits that description is the one between two small public colleges in Vermont — Johnson State College and Lyndon State College.

“They had compatible missions — one of them was more liberal-arts-oriented, and the other was more focused on career programs — so they merged and became Northern Vermont University,” she said, adding that the merger allows them to share central services and thus gain efficiencies in overall administration.

Whether Hampshire can find such an effective working arrangement remains to be seen, but Nelson takes a positive, yet realistic outlook.

“I continue to be optimistic because Hampshire is an exceptional place with a great reputation,” she said. “But it’s not easy facing layoffs and things like that. But I believe this year, 2019, will be the toughest year, and then things will get better.”

Charting a New Course

Time will tell whether this projection comes to pass.

The decision not to admit a full class for the fall of 2019 is seen by some as a perhaps fateful step, one that will make it that much harder to put the college on firmer financial ground moving forward.

But Nelson, as noted, is optimistic that the ‘Hampshire way’ will yield what could become a model for other schools to follow in the years and decades to come, as the higher-education landscape continues to evolve.

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

Education

Closing the Gap

Amanda Gould

Amanda Gould says the grant awarded to Bay Path University will fund a collaborative effort to help improve the digital fluency of the workforce.

When people talk about an ‘IT gap,’ Amanda Gould says, the appropriate response might be, ‘which one?’

Indeed, there’s the gap that seems to getting most of the attention these days, the one that involves the huge gender disparity in the IT workforce, with the vast majority of those well-paying jobs going to men, said Gould, chief administrative officer for the American Women’s College at Bay Path University, one of the institutions working to do something about this through its expanding Cybersecurity and IT degree programs.

But there’s another gap, she said, and this one involves the workforce and its digital fluency — or lack thereof. In short, too many people lack the necessary skills to thrive in the modern workplace, especially in IT-related roles, and the need to devise solutions for changing this equation is becoming critical.

For this reason, the nonprofit Strada Education Network committed $8 million to what it calls the ‘innovative solutions in education-to-employment’ competition, a name that speaks volumes about its mission.

And Bay Path emerged as one of the winners in this competition, garnering $1.58 million for a three-year project appropriately called “Closing the Gaps: Building Pathways for Women in a Technology-driven Workforce” (note ‘gaps’ in the plural).

This will be a collaborative effort, said Gould, adding that work is already underway with a number of partners, including the Economic Development Council of Western Mass., the MassHire Hampden County Workforce Board, the Massachusetts Technology Leadership Council, Pas the Torch for Women, Springfield Technical Community College, the UMass Donohue Institute, and others.

“Thinking about IT being in and of itself a discipline is, in my view, becoming obsolete.”

This work, said Gould, “involves extensive employer research and engagement, and building capacity of the American Women’s College to scale enrollment of adult women and prepare them with core cybersecurity and information-technology competencies that meet the needs of employers, support them as they move to degree completion, and assist them to successfully transition to careers in cybersecurity and IT-related employment.”

The key word in that sentence is ‘core,’ she said, because such competencies are now needed to succeed in jobs across virtually all sectors, not just IT and cybersecurity, and, as noted, many individuals simply don’t have them, and thus doors to some opportunities remain closed.

Opening them is the purpose of the of the Strada Education Network program, said Gould, adding that it will address a large problem that is obvious, yet often overlooked.

“What we’re not doing well overall when we think about our workforce is recognizing that technology is becoming increasingly more important in any role in any industry,” she explained. “Thinking about IT being in and of itself a discipline is, in my view, becoming obsolete; technology is a part of any organization running, and we should be less focused on training people to live in a silo or column that prepares them to fulfill very specific functions, and instead be training our women across all our majors to be thoughtful about how technology may impact their future roles in the workforce and how to be more engaged with ways technology helps them perform the aspirations they have in a variety of careers.”

Patricia Crosby, executive director of the MassHire Franklin Hampshire Workforce Board, agreed. She said her agency and other workforce-related partners will play a key role in this initiative — specifically bringing business leaders and those in the education sector together in the same room to discuss how curriculum can and should be structured to vastly improve the odds of student success and make what has been a fairly closed field much more open.

“The IT field has not been an open field to newcomers, diverse workers, and female workers,” said Crosby. “The Bay Path program is attempting to remedy some of that and make the pathways clearer.”

Overall, the nearly $1.6 million grant will be put toward a variety of uses, said Gould, who listed everything from career coaching to scholarships; from curriculum development to putting students in situations where they’re getting hands-on training in their chosen field. And all of them are pieces to the puzzle when comes to not only entering the workforce, but succeeding in a career.

For this issue and its focus on education, BusinessWest takes an in-depth look at the ‘closing the gaps’ initiative and why it is so critical when it comes to today’s workforce.

Keys to Success

Smashing Bay Path’s program down to a few key swing thoughts, Gould said it basically involves determining which IT skills are most needed in the workplace, which ones are missing in a large number of applicants and employees, and how to effectively provide those skills.

And while it’s easy to state the problem and this three-year project’s goals, devising solutions won’t be quite so easy because the problems are systemic and fairly deep-rooted.

Patricia Crosby

Patricia Crosby says the grant awarded to Bay Path University will help create clearer, better pathways into an IT field that historically has not been open to women, newcomers, and diverse workers.

“As higher-education institutions,” Gould explained, “we haven’t kept up with our education and our curriculum to make sure that, as students are leaving with a psychology degree or a communications degree or nursing degree, we are building in exposure to these tool sets and these skills. By being more theoretical in our education, we’ve almost created the gaps.

“I really think we’re at a moment in time when we need to be more thoughtful about integrating technology for all students,” she went on, adding that, if those in higher ed created the gaps, it’s now incumbent upon them to close them.

Elaborating, she noted that cybersecurity, while still a specific discipline and course of study, is also part of myriad job descriptions today — for those helping with social-media campaigns to those handling customer records — and thus cyber should be part of occupational training.

This is a relatively new mindset, she acknowledged, one that involves a close partnership between the business community and those in higher education.

To put it in perspective, she cited some research conducted by Strada and Gallup regarding the relevancy of educational programs.

“When they were interviewing higher-ed administrators about how prepared they thought their students were for the workforce, a majority of them said ‘they’re very prepared,’” she noted. “But when they interviewed employers, a very small percentage of them thought the students were truly prepared to enter the workforce. There’s an enormous disconnect.”

A commitment to closing it explains why the Strada network is giving $8 million to seven winners of its competition, and also explains why partners like the EDC and the MassHire facilities will play such a critical role in this endeavor.

They will help connect those with the project to industry groups and specific companies with the goal of not only determining the skill sets they need in their employees, but placing students in situations where they gain valuable hands-on experience.

These experiences can include job shadowing, interviewing someone in a particular role, project-based coursework, or actual internships, said Gould.

“There are a variety of ways we can get our students connected with employers,” she said, adding that such connections are vital to understanding the field, comprehending the role IT plays in it, and, ultimately, gaining employment within that sector.

“In an ideal scenario, our students are off and working,” she went on. “It would be better if they were working in a field they see as their career rather than in a job where they’re working to offset expenses. If there are ways to get students into the workplace before graduation, we want to nurture those entry points.”

Crosby agreed.

“In an ideal scenario, our students are off and working. It would be better if they were working in a field they see as their career rather than in a job where they’re working to offset expenses.”

“In this field [IT], more than any other, as much as any credentials or degrees, employers are looking for experience,” she said. “There’s a gap between the people who are learning it and the people who are getting the jobs because the people who get the jobs already have experience. There’s a bridge that has to be crossed between any education and training program and the workplace.

Sound Bytes

As she talked about the Bay Path program and how to measure its success, Gould said there will be a number of ways to do that.

These include everything from the level of dialogue between the business community and those in education — something that needs to be improved — to the actual placement rates of graduates in not only the IT and cyber fields, but others as well.

In short, the mission is to close the gaps, as in the plural. There are several of them, and they are large, but through a broad collaborative effort, those involved in this initiative believe they can begin to close those gaps and connect individuals to not only jobs but careers.

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

Cover Story

A Six-month Checkup

Mike Mathis, foreground, with recently promoted MGM employees

Mike Mathis, foreground, with recently promoted MGM employees, from left: Marissa Dombkowski, Bill Blake, and Nickolaos Panteleakis.

A half-year after opening its doors, MGM Springfield is well behind its stated goals and expectations for gross gaming revenues, or GGR, and the numbers have been declining each month since the fall. But the winter months are traditionally the slowest in this industry, said Mike Mathis, president and COO of the resort, and the company is still ramping up its operation. Overall, he said, there are a number of positive indicators.

‘Ramping.’

That’s the word you hear quite frequently from MGM’s leaders as they talk about the $950 million property in Springfield’s South End. Jim Murren, president and CEO of MGM Resorts International, used it early and often in a conference call with stock analysts last month following the release of MGM’s fourth-quarter earnings in 2018.

And Mike Mathis, president and COO of MGM Springfield, leaned on it as he talked with BusinessWest late last month, six months after the facility opened its doors. With casinos like this one, Mathis said, the ramping-up process, if you will, goes on for three years or so and is quite involved.

It entails watching, listening, learning, and adapting, all with the goals of growing visitation and, therefore, the bottom line, while also improving efficiency and making the operation in question more profitable.

“I think it’s premature to judge us, or anyone, on a partial data set; it’s a little early to say we’re going to underperform or overperform for our first year.”

“In the context of a new resort, it’s commonly understood within the industry that there’s a three-year stabilization period — a ramp period to stabilization,” he explained. “Three years serves as a benchmark. You’ve been through a few different seasonality rotations, you see the different ranges of weather, you see the different ranges of how holidays land, whether they land on weekends or midweek — you get all those different scenarios.

“You’re also building up your database,” he went on. “Seeing how your competition’s reacting to what you’re doing — how are they activating their property. You get a feel over a couple of years — did we do well that weekend because the competition didn’t have much going on? Or did we suffer because they put in a big act to counter that weekend? That all shakes out over two or three years.”

These references to ramping up are being generated by questions about revenues at MGM Springfield, and, more specifically, about why they are not approaching the numbers the company projected to the Mass. Gaming Commission.

‘Slower’ is the operative word being used with regard to revenues, and it fits if one considers MGM’s projections of $418 million in annual gross gaming revenue (GGR) in its first year of operation, or $34.8 million per month. Indeed, the company recorded $21.58 million in GGR in December, and just $19.7 million in January (February’s numbers will not be released for a few weeks). GGR for November was $21.2 million, the number was $22.2 for October, and in September, it was $26.95 million.

Mathis, while certainly acknowledging that the numbers are lower than projected, at least for the winter months, told BusinessWest that the $418 million projection given to the Gaming Commission was made several years ago, and that the landscape has changed in some ways since then.

Mike Mathis says the winter months are traditionally the slowest for casinos

Mike Mathis says the winter months are traditionally the slowest for casinos in the Northeast, and he is optimistic that visitation will climb as the mercury does.

Meanwhile … it’s early, said Mathis, referring to the fact that the casino has only been open for six months, and a few of those months (January, February, and early December, before the holidays) are among the slowest for casinos, especially those in the Northeast.

“I think it’s premature to judge us, or anyone, on a partial data set; it’s a little early to say we’re going to underperform or overperform for our first year,” he told BusinessWest. “If you look at our August and September numbers, we would have exceeded our expectations. And going into the winter months … that’s the low end of the season.”

And, overall, the casino is still ramping.

That means it’s still learning, collecting data, watching patterns develop, and adapting to what the data shows. As he said earlier, it’s an involved process that involves a number of factors, including the weather. Make that especially the weather.

Mathis said he and his team are tuned into the forecasts, because one thing he’s noticed thus far — and this counts as one of the surprises on his list — is that, despite a reputation for being hardy, people in New England are apparently easily scared off from traveling in snow — or even forecasts of same.

“We thought New England would be hardier than what we’ve seen on some of these snow days,” he said with a laugh. “We’ve had a little bit of experience with snow in Detroit and Atlantic City, but I think every market is unique, and we’re learning some of the patterns and behaviors.

“And it’s not just snow,” he went on, sounding much like area golf-course operators when they talk about rain and how it impacts them. “It’s what type of snow and what time of day it hits and what day of the week it hits. Weather forecasts have become an important tool for operating and planning; it’s been a very interesting learning curve.”

One that extends, as he said, well beyond snow, and into other realms such as where people are visiting from, how often they visit, which games they play, which restaurants they frequent, and much more.

Overall, and as might be expected, Mathis is optimistic that the monthly numbers for GGR will improve as the weather gets better and the casino can make much better use of its outdoor facilities with concerts — Aerosmith is coming for the first-anniversary celebration — and other activities.

But looming over MGM Springfield, in a big way, is the opening of a competing casino in Everett, slated for sometime this summer. Mathis said that development will further alter the landscape and certainly add new wrinkles to the ramping process.

Driven by Data

Mathis told BusinessWest that this first six months of operation have been a learning experience on all kinds of levels, and this, too, was to be expected, because gaming is still relatively new to Massachusetts (Plainridge Park Casino, a slots facility, opened in the fall of 2017), and while those at MGM had expectations, they didn’t know exactly what to expect.

What have they learned? For starters, they’ve learned that visitors much prefer the weekend to the weekdays. And while that sounds obvious, the disparity in the numbers is eye-opening.

“I’m surprised at how weekend-centric the business has been — the difference between weekends and weekdays is pretty dramatic,” Mathis noted, adding that, with the former, visitation averages roughly 18,000 to 20,000 a day, while with the latter, it’s closer to 10,000.

This disparity is far greater than it is in Las Vegas and with most other MGM properties, said Mathis, adding that one big reason for this is a still-ramping (there’s that word again) meeting and convention business in Greater Springfield.

Mike Mathis says the ROAR! Comedy Club has become a solid attraction for MGM Springfield

Mike Mathis says the ROAR! Comedy Club has become a solid attraction for MGM Springfield and a vehicle for bringing new audiences to the resort.

“We have the ability to impact those numbers midweek by putting more convention groups in the MassMutual Center, getting more citywide events, and getting more entertainment mid-week, which we plan on ramping up,” he explained. “There’s ways to impact that midweek business to the benefit of the entire downtown.”

What else have they learned? There’s that aversion to traveling in snow that was mentioned earlier. That was in evidence a few weeks back. The weekend before Presidents Day was one of the best the casino had since it opened, said Mathis, crediting MGM’s ROAR! comedy shows and a host of other things happening downtown and elsewhere, including two Thunderbirds games and a camping and RV show at the Big E, for the surge, one that contributed to one of the few real traffic jams recorded since the property opened.

But the holiday itself (a day off for the vast majority of workers in this region) was considerably slower, and Mathis believes that the few inches of snow that fell overnight had a lot to do with this. Of course, Monday is also a weekday.

What else? Well, to date, MGM Springfield is “underperforming” (Mathis’ word) when it comes to attracting people from Central Mass. Indeed, while the casino does well in drawing people from Upstate New York, New Hampshire, Vermont, and Connecticut (the I-91 corridor), the numbers from the central part of the state are less impressive, which, if you take the glass-is-half-full approach, which Mathis does, means there’s considerable room for growth.

“We’re trying to understand the phenomenon of east-west travel on the Pike, frankly,” he explained. “I think there’s a bias to go north-south — I think that might be the more the traditional traffic pattern, and that’s what the data shows — but we’re also doing well with Boston.

“The good news about how this data shakes out is that there’s upside opportunity for us in Central Mass.,” he went on. “And this might blunt the impact of the Everett casino.”

There have been a few other surprises, including the number of people making their first visit six months after the ceremonial ribbon was cut.

“I’m still surprised by how many people I’m meeting on the floor who are seeing it for the first time,” he said. “Our team has been at this since 2012, so sometimes I feel that anybody who was interested in coming would have come in the first month or two. But there are people hitting the floor every day who are brand new, and for whatever reason have decided that this is the weekend they want to check it out.”

A Laughing Matter

While much of the media’s focus has been on GGR and the hard fact that the numbers are not where they were projected to be, Mathis said there are a number of positive developments to note as the casino passes that six-month mile marker. Here are several he listed:

• The data clearly shows that the opening of MGM Springfield has grown the overall gambling market in this broad region, he said, adding that this becomes clear when one does some simple math and looks at MGM’s revenues and the declining numbers for competitors. The former is larger than the aggregate of the latter, which translates into growth, which bodes well for all players.

“I think one of the good things about new properties coming into the market is it keeps everybody in a position of having to keep up.”

“I’ve met countless customers on our floor who have said that MGM Springfield is their first casino gaming experience, and there’s a few reasons for that,” he said. “Some say they were in Las Vegas, they’re Mlife members, and they’d been to a convention or show, but didn’t happen to go into the casino on that trip; with this in their backyard, they thought they’d give it a try. Others will say they like our non-smoking gaming environment and had never gone into another casino because they didn’t want the smoke; that’s a real competitive advantage for us.”

• The ROAR! Comedy Club has been a solid addition to the MGM lineup, helping to drive visitation, especially during some of the slower months on the calendar. Located in the historic Armory, the shows have drawn consistent crowds, said Mathis, adding that, as the calendar turns to spring and then summer, the team at MGM Springfield will look to maximize its outdoor facilities with a full slate of entertainment to be announced in the coming weeks.

“In talking with the comedians, they say we’re now the buzz within that community — it’s a cool venue, something all the comics want to play on their East Coast rotation,” he told BusinessWest. “it’s a great way to expose the building to different customers.”

• The team continues to find new ways to leverage its many facilities at the casino, said Mathis, noting that it has added entertainment in its ballrooms — Sinbad recently performed two sold-out shows — and the staff continually looks for new opportunities.

“We’re doing a lot of fun activations in different parts of the resort,” he explained. “We want to make sure we understand the booking patterns for convention and meeting groups, and when we see holes, it’s like an empty airplane seat; how do you fill it, and how do you bring new customers to the resort?”

• The hotel and food and beverage side of the casino operation has been exceeding expectations, said Mathis, adding that, among other things, a recently added weekend brunch at Cal Mare restaurant has helped grow that side of the equation.

“Our hotel and restaurant business has been extremely strong, and we thought that would be the case, because there’s good, local lodging and F&B in the market, but perhaps not to a Vegas standard, and we believe we’ve brought a Vegas standard to this market. We’ve exceeded occupancy, and we’ve exceeded our average daily rate.”

• But despite this success, there has been some spillover to other area businesses in this sector, and this is by design, said Mathis, noting that the hotel, with 252 rooms, is not particularly large, and the dining options, while growing (groundbreaking on a Wahlburgers is slated for later this year), leave plenty of opportunities for other eateries in the downtown.

“One of the reasons we sized the hotel the way we did was that we wanted to make sure that developments like ours have a spillover effect to other businesses,” he said. “And we wanted to make sure that came true. Some restaurant owners, including the Caputo family at Red Rose, have been quoted as saying that their business is up 20%, and people are expanding and extending hours.”

• Likewise, the numbers regarding the workforce have been generally positive, said Mathis. He estimated a 35% churn rate since the facility opened its doors, and noted that, while this might sound high to business owners and managers in other sectors, it’s in line with industry norms and actually lower than in many other areas.

Meanwhile, the targets for hiring Springfield residents, veterans, women, and minorities have all been met or exceeded, and many employees have already moved up the ladder since the casino opened its doors.

“I got the stat the other day … I think we’ve had 200 or so promotions since day one, and 30% of those are Springfield residents,” he noted. “Nothing makes me prouder than to see a line-level employee on day one who’s now wearing a suit in a supervisory management role. And it’s happening.”

As examples, he cited three employees who joined him for photos later in the day: Bill Blake, formerly graphic supervisor and now creative manager; Nickolaos Panteleakis, formerly Front Services manager (where he handled many front desk duties) and now director of Front Services; and Marissa Dombkowski, who has been promoted twice already — she started as an HR communications specialist, moved up to Entertainment Marketing coordinator, and is now Marketing manager for the MassMutual Center.

Overall, and to recap, Mathis reiterated that ramping up is, indeed, a three-year process, one that involves a serious learning curve on many different levels.

“I tell my team all the time, ‘if it were easy, everyone would do it,’” he said of casino operations in general. “That’s why we’re here — to manage through, collect data, and be smarter every day as we collect data and finetune the business.”

Driving Force

Mathis was one of those people caught in that traffic jam on the Saturday of Presidents Day weekend.

He told BusinessWest that it took him more than 45 minutes to get to an event downtown from his home in Longmeadow, normally a 15-minute drive. But unlike most others, he certainly wasn’t complaining.

“I’ve never been happer to be in stand-still traffic,” he said, adding that, while it has always been MGM’s goal to minimize such disruption, he’ll gladly take more nights like that in the weeks and months to come.

And he predicts he’ll be getting more as that ramping process continues.

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

Features

The Spirit Moved Him

Paul Kozub stands in front of picture of his new distillery in Poland.

Paul Kozub stands in front of picture of his new distillery in Poland.

Almost from the day he started V-One Vodka, Paul Kozub has been dreaming about, and planning for, the day when he’d make his product himself, at a distillery he owned in Poland, the birthplace of his ancestors — and vodka itself. Now, that day is here, and Kozub believes this huge investment will enable him to scale up his venture on a dramatic level.

Paul Kozub says the hardest part about the whole thing was keeping it a secret.

And that’s saying something, because there were many hard parts to his ambitious plans to building his own distillery to produce the Vodka label, V-One, that he brought the marketplace nearly a decade ago.

There was the process of finding a location in Poland, birthplace of both his ancestors and vodka itself, or so the story goes, as well as designing a facility and getting it built. And none of that could happen unless he sold enough shares of his company to raise the needed capital — but not so many shares that he would lose majority ownership of the venture.

But the keeping-it-all-a-secret part? That was quite necessary because, if word ever got out to those who had been producing his vodka since he launched his label that he was going into that end of the business himself, then they would stop producing it for him posthaste and leave him scrambling to not only fill orders but find someone else to make it in the interim.

So Kozub went to great lengths to keep his search and then his building project a secret. And, as he said, it wasn’t easy.

“My family and friends knew, but I had to really keep things quiet otherwise,” he explained at a short press conference on Feb. 26 to announce the purchase and expansion of a distillery in Kamien, Poland, about two hours southeast of Warsaw. “Every time I went to Poland, I wouldn’t post it on Facebook, because my suppliers are friends of mine and they’d see that I’m there [Kamien] and not coming to see them, so they’d know something was going on.”

As noted, he said this at a press conference, which means this huge development for the company is no longer a secret. Kozub told those friends who were producing his product (the operative word there is ‘were’) about it a few weeks ago, and he said they quite happy for him. At the Feb. 26 press conference, he told several media outlets, supporters, clients such as MGM Springfield, area bars and restaurants, and more.

The distillery in Kanien, Poland has a long history, and V-One Vodka will be writing an intriguing new chapter.

The distillery in Kanien, Poland has a long history, and V-One Vodka will be writing an intriguing new chapter.

It was an emotional announcement and an intriguing new chapter in the V-One story, which started back in 2003, when Kozub started distilling in his home in Hadley after using a $6,000 inheritance from his “Polish moonshining grandfather” to buy some equipment. There have been a number of milestones along the way, from the creation of his signature bottle to expansion into different markets; from the addition of several new flavors to Kozub’s being named BusinessWest’s Top Entrepreneur for 2016 (in recognition of all of the above).

The distillery, which he describes as a “multi-million-dollar investment,” without being more specific, represents the next milestone and one Kozub believes will greatly accelerate growth of the company.

“This will allow us to produce 400 times more vodka than we produce today; we will be looking to not only expand as a national brand, but as an international brand,” he explained. “This represents the next stage of the company — and a very exciting stage.”

Elaborating, he said he doesn’t have a firm timetable, obviously, but expects to expand outside of New England and down the East Coast in the years to come, and will then look to expand globally.

For now, though, he’s focused on getting the first bottle off the line in Kamien, something that should happen on or around April 1.

For this issue, BusinessWest looks at everything that has brought Kozub to that moment and at what will likely happen next.

Proof Positive

As he announced his expansion into Poland — a return to his family’s roots, if you will — Kozub did so with a type of high-tech slideshow. Only it started with a few low-tech pictures that captured some of those milestones described earlier.

One was of his first house in Hadley, a small Cape that he moved into just a few days after his Polish grandfather died, and another captured its basement, where he first started making vodka, or “moonshine,” as he called it. A third zoomed in on the special plumbing that enabled cold water to run through the still, a development that made everything that’s happened since possible.

Other pictures captured his first V-One bottle and his first van, which he purchased soon after going into business. He would load it with 100 cases of V-One and deliver it to clients across the region himself.

The addition built onto the distillery brings all aspects of the business together in one place — from production to bottling to warehousing.

The addition built onto the distillery brings all aspects of the business together in one place — from production to bottling to warehousing.

Yes, that’s a lot of firsts. But to take the venture forward in a meaningful way, Kozub said he needed to control production of his vodka with his own distillery. He said he’s known this almost from the beginning, but the costs of such a facility have been imposing and, until recently, prohibitive.

But knowing he needed to take this step, he raised capital by taking on additional investors as part of a process that really began a few years ago. Subsequent steps included scouting locations and kicking the tires on existing distilleries available for acquisition.

With that explanation, his show shifted to video captured by his phone as he traveled through the community he eventually chose to be home to his distillery.

“There’s thousands and thousands of acres of fruit trees here … it reminds me a lot of Hadley,” he said as the car transporting him moved down a rural road. “As soon as I saw this, I knew it was the place I wanted to call home.”

Home, meaning the actual distillery itself, has been around for more than 133 years, and thus it has some history, said Kozub, noting that, during World War II, the Nazis took it over and produced different kinds of spirits.

The next chapter in its history involves a sizable expansion necessary for producing V-One in the quantities that Kozub is envisioning for the years and perhaps decades to come. Indeed, the facility will include, in addition to the distilling equipment, laboratory space (mostly for R&D and new product development), a bottling area, and warehouse space.

Thus, when asked what this ambitious move does for the company, Kozub said quickly, “it makes everything better.” Elaborating, he said that, almost from the beginning, he has understood the critical need to have more control over every aspect of the V-One operation, especially production.

“I wanted to be in control of production — I’ve had a number of production nightmares over the past 15 years,” he explained. “Literally, we’ll be planting our own grain, our own spelt, harvesting it, and processing it. We like to say that, from farm to glass, we’ll be in control of each process, and that’s the trend today.”

Beyond control, Kozub said this expansion into Poland and the opening of his own distillery allows him to accelerate the process of growing the V-One label and taking it into new markets — in this country and then eventually abroad.

“I really never wanted to make rum or tequila or gin, but I have at least two dozen other vodka products I’d like to make someday,” he told those assembled at V-One world headquarters (a converted church) on Route 9 in Hadley. “And this allows us to be really innovative with doing some of that stuff; when someone else is making your vodka, you’re limited to their schedule and their timeframe.”

Moving forward, Kozub said that, while he did a sell an interest in the company — something he could do only after its raising its value over the past decade through new products and a wider reach market-wise — he is still the overwhelming majority owner, and still one who is quite hands-on and involved in all aspects of the business. That said, he still plans to spend the vast majority of his time in this country, and probably visit Poland about as much as he does now — maybe once a quarter.

While leaving actual production in the hands of a manager in Poland, Kozub will focus on the proverbial big picture and, more specifically, territorial expansion for V-One and a scaling up of the operation.

And having his own distillery, as he said, will certainly help in this regard.

“People comment to me all the time … ‘you’re a 13-and-a-half-year-old business; how come you haven’t gotten out of the New England market?’” he told BusinessWest. “I’ve had some serious production problems and packaging issues that have worried me about getting into Florida or Texas or California, three of the biggest vodka markets. This [distillery] will really allow us to scale up and tackle those challenges.”

Expanding within the U.S. and then overseas markets will obviously require more capital, he added, and he plans to sell additional shares in the business within the next year.

Bottom Line

As he continued his slideshow presentation before the press and his supporters, Kozub placed a map of Poland on the screen to show exactly where his distillery will be located.

He did so to offer a point of reference, offer up a short lesson on Polish geography, and also show where his ancestors are from — a small town not far Krakow. But he also did it to be a touch poetic.
“This really helps put on us on the map,” he said of the distillery, using that phrase to say a great deal.

This venture is now on the map, literally, and its product will be on — meaning available to — a much larger chunk of the map in the years to come because of what this facility will enable the company to do.

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

Banking and Financial Services

What’s in a Name? Plenty

Mike Buckmaster

Mike Buckmaster, vice president of Commercial Lending for Community Bank, N.A.

Since entering the market in 2017 through the acquisition of Merchants Bank and its branch in Springfield’s Tower Square, Community Bank, N.A. has been working to build on its foundation in this region. It brings to the highly competitive local banking landscape both considerable size and an operating mindset commensurate with the name on the letterhead.

Mark Tryniski acknowledges that it sounds illogical that a financial-services institution with $12 billion in assets and more than 230 branches could call itself a community bank — let alone call itself Community Bank, N.A.

But Tryniski, president and CEO of the Syracuse, N.Y.-based institution, said ‘Community Bank’ represents more than a name — and one that fits. Indeed, it’s more like an attitude.

“As our name suggests, we’re a community bank — that’s how we’ve always operated,” he explained. “And when you put the name ‘Community’ on your bank, you’d better function as a community bank — and we do.

“There is such a thing as a community-bank model,” he continued. “You push authority down to people in the branches, as opposed to the big-bank model, where you walk in the door looking for a home-equity loan and they put you on the phone with a 1-800 number and someone working in another country. Community banks don’t do that.”

Mark Tryniski

Mark Tryniski

 “When you put the name ‘Community’ on your bank, you’d better function as a community bank — and we do.”

This operating mindset has enabled the institution to grow considerably over the past several years and into a number of different markets, including Springfield, accomplished through the acquisition in 2017 of Merchants Bank, which had previously acquired NUVO Bank, which operated a single branch within the 413 within a large footprint in Tower Square.

Since putting its name over the door on Main Street, Community Bank, N.A. has downsized that space considerably, while simultaneously working to establish itself and broaden its horizons within this market.

It has done so by essentially living up to the name over the door, said both Tryniski and Mike Buckmaster, vice president of Commercial Lending. They both said the institution possesses the formula that’s required to succeed today — a community-bank feel, but a large size that is necessary in a changing, quite challenging financial-services marketplace today.

“I think that, over a period of time, the market has accepted the fact, to a degree, that this is a consolidating industry,” said Buckmaster, who has logged more than 30 years in the banking industry, locally and in the U.K., and has carried business cards bearing the logos of NUVO and Merchants Bank, among others. “The differentiating factor tends to be the commercial banker, and if the commercial banker can continue to deliver in terms of service and business development, there tends to be a good degree of customer loyalty toward the banker, even through various acquisitions.”

That lengthy explanation helps explain why the Springfield facility has been able to enjoy steady growth in its portfolio even as the name on the wall of Tower Square has changed several times this decade.

Tryniski agreed, but said the combination of size and small-bank attitude is becoming ever more important as the consolidation movement continues without any signs of slowing down.

“I’ve been around the banking industry for a little more than 30 years, and there’s been a dramatic change in the banking landscape, mostly centered around consolidation,” he explained. “When I started, in the ’80s, there were 16,000 or 18,000 banks; now, there are roughly 6,000 banks.

“And I think the trend toward consolidation will continue because of efficiencies that can be garnered by scale and technology,” he went on. “The bigger you get, the more you can justify investments in technology to give you more efficiency. It’s hard for the smaller banks — you have to really be efficient and disciplined.”

Overall, Community Bank will look to get bigger still, and is looking at opportunities to expand within the Western Mass. and Connecticut markets, said Tryniski, but “haven’t found what the right opportunity is yet,” as he put it. Elaborating, he said growth for this institution will continue to come as it has historically, through a mix of organic growth and acquisition, with more of the latter than the former, especially in areas with slow or no growth but more than enough competition, and Western Mass. certainly fits that category.

In such markets, growth can come only by taking market share from other institutions, he went on, adding that this is generally difficult to do. Community Bank has had a good amount of success doing just that, however, because of that aforementioned enviable combination of large size and smaller-bank feel.

Community Bank, N.A.

Mark Tryniski says Community Bank, N.A. will look for opportunities to expand locally beyond its location in Tower Square.

For this issue and its focus on banking and financial services, BusinessWest talked at length with Tryniski and Buckmaster about how Community Bank, N.A. has firmly established its presence in the local market and how it intends to secure additional market share and perhaps expand its footprint in the 413.

By All Accounts

Since acquiring Merchants, and therefore all its branches, Tryniski has visited Springfield on several occasions as part of his efforts to fully understand the broad geographic area served by the institution — one that stretches from the Northern Kingdom in Vermont to the Southwest corner of New York to the Lehigh Valley in Pennsylvania — and meet both team members and customers.

“We spend a lot of time on the road,” he said of the management team at the bank, adding that, when he does visit Springfield, or any other community served by the bank, he makes a point of learning as much about the region as he can.

In the City of Homes, he’s become familiar with some of the players within the business community, has found a few restaurants he likes, and is both impressed with and encouraged by the high level of energy he’s seeing in the central business district.

He said there are a great many similarities between Springfield and Syracuse, and in some ways, that has helped him understand the dynamics of not only the communities themselves, but the banking environment here.

“They’re remarkably similar, actually,” he said. “They have the same population, they have an industrial history, they have a stable-but-not-growing population, there’s a lot of education, the downtowns look very similar … they’re very much alike. Springfield feels to me like Syracuse.”

From a banking perspective, that means a community that, as he said, is experiencing comparatively little growth, population-wise and new-business-wise, and has a crowded field of competitors for financial-services products — banks and non-banks alike.

In this environment, operating with that community-bank model — but with roughly $3 billion in assets behind the institution — is what amounts to a competitive advantage — a large competitive advantage, said Tryniski.

“We tell our branch managers that we want them to be the president of the bank in their town,” he explained. “And we give them the authority to do that; we give them lending authority and authority around charitable contributions, fee waivers, fee adjustments, things like that. We try to vest as much authority in our branch managers locally as we can, and let them make decisions about their customers and their market.

“We probably have more of a community-bank business model than most community banks,” he went on, “because most don’t operate like that.”

However, in this market, there are still a large number of community banks — more than in many other markets — and this simple math requires that small-bank mindset. Meanwhile, the field of competitors continues to change and grow, thanks to technology, which has brought many non-bank players into the mix, said Tryniski.

“We compete now with all sorts of non-bank competitors on the lending side — for everything,” he told BusinessWest. “Whether it’s personal loans, business loans, car loans … it doesn’t matter what kind of loan you’re making, you’re competing against a multitude of other, non-banking enterprises. And the same is true on the deposit side as well.”

Buckmaster agreed, noting that, on the commercial-lending side, with all that competition, as well as all that consolidation, having a local address is not the same thing as having people who know the local market and have worked within it for years, if not decades.

“All that competition puts the emphasis very much on the banker and being able to provide the service and support growth going forward as clients need,” he said, adding that Community Bank is large and stable, and thus able to provide commercial-banking products of all sizes, including dollar amounts beyond the scope of many of the smaller community banks that populate the region.

The sweet spot for the bank, though, is loans between $1 million and $3.5 million, he said, adding that the bank is able and willing to continue writing loans for small-business owners, something the very large banks seem less interested in doing so.

This flexibility has enabled the institution now known as Community Bank, N.A. to continue to serve the customers added to its portfolio when it was NUVO, he went on, adding that loans have been written for businesses across virtually all sectors and for a number of commercial real-estate acquisitions as well.

“We’ve have some customers who were initially small back eight or nine years ago who have grown into significant customers that require a significant increase in loan support going forward,” he told BusinessWest. “We’ve seen some good growth in commercial and industrial customers over that period of time, and in addition, we’ve also seen significant new dollars in different types of commercial-investment real estate, whether it be locally in Western Mass. or further afield.”

Worthy of Interest

Returning to some of those numbers mentioned earlier — the 230 branches and current status as the 125th-largest bank in the country — Tryniski said they certainly make Community Bank, N.A. sound big. And it is.

“But we’re a lot close to the smallest bank in the country than we are to the biggest, even though the numbers say we’re one of the biggest,” he noted, adding that, in today’s banking climate, it’s not how big a bank looks on paper that matters, but how big it acts in the markets it serves.

And with that as the benchmark, this institution does indeed live up to the words on its stationary and over those 230-odd doors.

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

Modern Office

Loosening Up

For decades, dress codes in business environments were simple — suits or jackets, ties, dresses, nylons. But there’s been a shift in recent years, at companies both large and small, toward a more casual dress policy that projects professionalism through slightly more casual wear, a trend often summed up in the phrase ‘dress appropriately.’ The result, proponents say, are more comfortable — and, hence, happier — workers, which is something any company wants.

It was only supposed to be a summer-long experiment, Christine Phillips said.

“Up until the summer of 2016, it was pretty much shirts, suits, and ties for men, and dresses, jackets, and nylons for women,” said Phillips, first vice president of Human Resources at PeoplesBank, of her company’s dress code. “The expectation was a very professional dress environment. But in some of our employee surveys, the concept of a more casual dress code kept coming up.”

There was some precedent, even in the traditionally buttoned-up world of finance; that was the year JPMorgan Chase made waves on Wall Street by making ‘business casual’ its official dress code. Other large corporations have done the same, following the lead of Silicon Valley and the tech sector, which have long been known for more casual dress.

“When people feel more comfortable in their work environment, when they can reflect their personality more, they feel good about themselves and feel good about their workplace. It’s been extremely well-received by all our associates.”

So, PeoplesBank leaders decided on a half-measure — loosening the policy for one summer.

“We took it down a notch — guys didn’t have to wear ties, women didn’t have to wear nylons. We relaxed on some of the more professional aspects — instead of a jacket and tie, just a dress shirt was fine; even a golf shirt was OK. For women, it could be more summer dresses, or open-toed shoes. In a way, we listened to what employees were asking us to consider and decided to use the summer as a test to see how things went.”

The result? “It went really well. People were excited about the fact that they could take the dress code down a little.”

That wasn’t too surprising, Phillips said. Loosening dress codes has been a hot topic for a long time at HR roundtables she’s attended, and other banks have waded into that water. At the start of 2017, PeoplesBank made it permanent as well, writing a less formal dress code — the bank calls it ‘professional casual’ — into policy year-round.

“We approached this as a workplace benefit,” she told BusinessWest. “When people feel more comfortable in their work environment, when they can reflect their personality more, they feel good about themselves and feel good about their workplace. It’s been extremely well-received by all our associates.”

MassMutual arrived at the point slightly earlier. After years of publishing a policy of specific do’s and don’ts, in the spring of 2015, the corporation boiled its dress code down to two words that have often been used in today’s work world: ‘dress appropriately.’

“This was an effort to reflect the more collaborative, innovative, and open culture that was building at the company, as well as simply trusting our employees and providing them with more empowerment and accountability,” said Susan Cicco, MassMutual’s head of Human Resources & Employee Experience.

Christine Phillips (second from left) with fellow PeoplesBank employees

Christine Phillips (second from left) with fellow PeoplesBank employees Anthony Polo, Joseph Zazzaro, and Joseph Fimognari, all dressed in ‘professional casual’ attire.

“What someone wears is very personal, and we want all of our employees to be comfortable and to bring their whole selves to work,” she explained. “We also want employees to have the flexibility to express their own individuality while trusting them to exercise good judgment.”

While the way employees are expected to dress often depends on what they’re doing that day — a client meeting for instance, might require a more formal look than an afternoon behind a desk — both companies are simply reflecting a broader move in the work world away from suits, ties, and dresses. The reasons are myriad, but they all come back to employee satisfaction, and how that affects the entire workplace culture in a positive way.

Decisions, Decisions

Once an employer shakes free of the idea that looking good always means formal dress, it can be freeing to simply trust that workers will make the right decisions with what they wear, Cicco said.

“It’s about placing more trust and accountability in our employees to manage their personal brand and reputation, and in our managers to set expectations and provide guidance for what’s considered appropriate,” she told BusinessWest. “It’s made a notable difference — life just feels a little bit easier.”

Still, for professionals accustomed to formal dress, the new guidelines can complicate matters, too, said Will Brideau, owner of menswear store Jackson & Connor in Northampton.

“What someone wears is very personal, and we want all of our employees to be comfortable and to bring their whole selves to work. We also want employees to have the flexibility to express their own individuality while trusting them to exercise good judgment.”

“We’ve seen people coming in saying, ‘I don’t have to wear a tie to work anymore; the office is really dressing down lately. They’re saying I don’t need a sport coat, just a nice button-down shirt, just dress appropriately for clients. How do I put an outfit together?’” he explained. “To a large extent, a suit and tie is a uniform, but now there’s a lot more flexibility, where they need to put together a semi-casual outfit — a business-appropriate outfit that feels good and looks good.”

While matching dress pants or a suit with a dress shirt might have come easy, he went on, exploring a wider range of “middle-of-the-road pants” — not too dressy, but not too casual — can be trickier for some.

“People are playing around and have a lot more options, and that absolutely requires more from us in terms of directing people to find outfits that will really split the difference and present them as being professional, but not overdone,” he said. “It’s interesting for us watching all of that change, seeing people shift into a more casual workplace style, based on who they’re interacting with on a daily basis.”

Frankly, Brideau went on, he enjoys the challenge of helping customers craft outfits by pulling together separate items — a shirt, dress pants, maybe a vest — they may struggle to assemble themselves after years in suits and ties.

Will Brideau

Will Brideau says he enjoys helping men who are used to suits and ties assemble more casual outfits for work.

“We’re doing more piecing together of separate items to make a creative presentation, which is fun for us. We love doing that stuff,” he said. “And it gives guys more range for creativity and to be playful with the things they’re wearing.”

Still, playful has its limits, Phillips said.

“One thing that was important to us — and we talked about this before we did it — was that, in dealing with our customers, our communities, even each other, there’s an expectation of how we should look, and we have to maintain that. It doesn’t mean we have to stay in suits and ties, but we still have to respect the institution maintain a level of professionalism, even though it’s a little more casual.”

For example, “if we have a community event that requires us to dress up, or a client meeting or business meeting that requires us to dress up, that’s written into the policy. And it absolutely has not been an issue.”

There are a few garments that are still off-limits at the bank, however, from tight-fitting clothing to jeans and T-shirt.

“Jeans are not in our future,” she said. “That’s not something we feel is aligned with our brand, with how we present ourselves. But we feel the professional casual is totally aligned with our brand.”

Culture Shift

Cicco noted that MassMutual’s dress code is just one of a number of ways the company continues to evolve its overall culture.  Other areas of focus include a stronger commitment to diversity and inclusion, modernizing its benefits and leave policies, having a continuous improvement and learning mindset, and realizing small things are big things. The dress code falls firmly into that latter category.

From left, Peoples-Bank’s Caitlyn Powers, Linda Parlengas, and Aaron Sundberg

From left, Peoples-Bank’s Caitlyn Powers, Linda Parlengas, and Aaron Sundberg enjoy the company’s less-formal dress code.

“When this new policy was introduced, our guidance to employees was simply to consider their daily schedule, who they were meeting with, and what was appropriate. That’s it,” she explained. “We also generally suggest to our employees that, if there’s any doubt, don’t wear it. This has worked out really well. As you walk the halls of MassMutual on a typical day, you can feel the more relaxed atmosphere.”

Oddly enough, Brideau said, he’s still selling plenty of suits and ties; in fact, neckties were his number-three seller by category in 2018, up from number four in 2017. He has an idea why: there will always be a need for formal wear, even if it’s on the decline in the workplace.

“We’re selling more neckties, more bowties, more dress pants,” he said. “I think, perhaps, because they’re not as necessary for work, when you need them, you really need them. More people are saying, ‘I never wear suits for work, and now I have to go to a wedding, or a memorial service comes up suddenly, and it gives them an opportunity to get a suit. You never need a suit until you need a suit.”

Increasingly, companies are saying they don’t need suits, or dresses, or any staples of the traditional, formal dress codes of decades past. Phillips says that’s a positive thing.

“I would encourage companies, if they’re thinking about doing this, to have good communication with their associates about it. We said, ‘we hear you, we know this is a benefit to you, and if we’re able to offer this to you, we have expectations how you’ll respect the policy and follow it.’ And now, it’s so rare we have concerns about the dress code.”

While some may point to loosening dress codes as a Millennial-driven trend, she added, workers of all generations seem to appreciate it.

“People who have grown up in banking, and all they’ve known is a professional look, they’re excited the bank could accommodate a look of professionalism but not require them to wear a suit and tie every day,” she said. “They’re able to project professionalism in a slightly more casual dress code.

“People were so excited we were doing it for the summer — that was just a ‘wow’ moment — then when we announced we could move to a year-round policy of professional casual, that really excited people,” she went on. “It also sends a message of trust; instead of saying, ‘it’s always been this way,’ we listened, and we felt this was something we can accommodate in our work environment.”

Joseph Bednar can be reached at [email protected]

Community Spotlight

Community Spotlight

GTI’s cultivation facility in Holyoke

GTI’s cultivation facility in Holyoke has been operating since last summer, and many new ventures could be opening in the years ahead.

Alex Morse says his phone was already ringing — quite frequently, in fact — before he was interviewed on CBS This Morning late last June.

But then, it really started ringing. And his e-mail box became even more crowded.

That’s because, with that report, Holyoke’s efforts to roll out the welcome mat for the cannabis industry, pun intended, became a national story rather than a local story — although it was already well-known.

Yes, this was the detailed report where Morse told CBS that the city once known as the ‘Paper City’ might soon be known as the ‘Rolling Paper City.’ His tongue wasn’t in his cheek, and there was a broad smile on his face as he said it.

Getting serious, or more serious, because he was already serious, he told CBS, “it’s legal … people need to wake up; the days of the past are moving forward. Holyoke has embraced the industry, and we acknowledge that this is an economic-development driver for us.”

Morse, and Holyoke, woke up long ago, meaning just after (or maybe even before) recreational marijuana became legal in Massachusetts in the fall of 2016, and today it is making giant strides toward creating what officials are calling a ‘cannabis cluster.’

And they’re comparing it, in some ways, to the cluster that put this city on the map — figuratively and quite literally (this was a planned industrial city) — the paper and textiles cluster.

As they used that word ‘cluster,’ both Morse and Marcos Marrero, the city’s director of Economic Development, said it means more than the creation of a number a number of businesses and jobs in a specific sector, although that’s a big part of it. It also means establishment of an infrastructure of support services that can have a large multiplier effect, if you will.

“With a cluster, it’s more than the sum of its parts,” Marrero explained. “Once you have a cluster, then you have an expertise, just like Holyoke did when it was the Paper City. Just as you have an expertise with paper, you can have an expertise with all the expects of this [cannabis] business.”

Elaborating, he said cannabis-cultivation facilities require highly specialized construction, lighting, anti-contamination, air-movement, and security systems, and all this adds up to opportunities for companies in this area that can handle such work.

In many ways, Holyoke is well on its way to seeing this cannabis cluster become reality, said Morse, noting that one large cultivation facility, Green Thumb Industries (GTI), is currently operating in a former textile mill on Appleton Street. And there are several other businesses across the wide spectrum of this business — from cultivation to retail — moving their way through the involved process of getting permitted to operate and eventually absorbing some of the vast amounts of commercial real estate that are vacant or underperforming.

Holyoke at a Glance

Year Incorporated: 1786
Population: 40,341
Area: 22.8 square miles
County: Hampden
Residential Tax Rate: $19.29
Commercial Tax Rate: $39.87
Median Household Income: $36,608
Median family Income: $41,194
Type of Government: Mayor, City Council
Largest Employers: Holyoke Medical Center, Holyoke Community College, ISO New England Inc., PeoplesBank, Universal Plastics, Marox Corp.
* Latest information available

“For us, cannabis is another form of manufacturing that’s bringing buildings back to life, being a revenue generator and job creator,” said the mayor.

And as they say in the agriculture business, Holyoke is certainly fertile ground for the cannabis industry. Indeed, it boasts, by the mayor’s estimate, 1.5 million square feet of vacant or underutilized former mill properties. Meanwhile, it has, again, by Morse’s calculations, the lowest electricity rates in the state (Holyoke has its own municipal utility), and it has something just as important as those ingredients — a giant, figurative ‘welcome’ sign when it comes to this business, as will become clear later.

But cannabis isn’t the only positive development in this city. Holyoke is also making great strides in ongoing efforts to attract entrepreneurs and arts-related businesses. It is also convincing more people, especially the younger generations, that this is a place to live as well as work and operate a business. And it’s seeing many of those aforementioned mills being put to creative and momentum-building uses.

Mayor Alex Morse

Mayor Alex Morse, an early supporter of the cannabis industry, says its many components collectively form an economic driver in Holyoke.

All of the above can be seen in one high-profile project known as the Cubit Building, the structure on Race Street that takes that shape. The first two floors are now occupied by the Holyoke Community College MGM Culinary Arts Institute, a story that embodies education, workforce development, and economic development, and in the floors above are apartments that were leased out even quicker than the optimistic owners thought they would.

“You drive by at night, and it’s all lit up,” said the mayor. “People are living on the top two floors, and on the first two floors you see students in the chefs’ hats cooking and doing classes; there’s a lot of vibrancy on Race Street.”

Lights are coming on all over Holyoke, and for this, the latest installment of its Community Spotlight series, BusinessWest examines how this has come about and why Holyoke is creating a buzz — in all kinds of ways.

Budding Ventures

As noted, this cannabis cluster is a solid work in progress, with GTI now approaching a full year in business and several other projects in various stages of development.

Conducting one of those ‘if-all-goes-well’ exercises, Morse said he can envision a cluster that generates perhaps 300 to 400 jobs and many types of businesses, from cultivation facilities to cannabis cafés like those in Amsterdam. If that picture comes to fruition, marijuana-related businesses would constitute economic development in many different ways, from jobs to tax dollars; from revving up the real-estate market (aspiring ventures have acquired options on a number of properties) to giving tourism a boost; from creation of support businesses to helping give Holyoke a new brand.

As Morse told CBS — and BusinessWest — cannabis has become an economic driver. And city officials have had a lot to do with this by being so aggressive, welcoming, and accommodating.

As one example, Morse and Marrero cited the host-community agreements that such businesses traditionally sign in order to set up shop. Some communities have been excessive in their requests (or demands), while Holyoke has taken a different tack.

“These agreements have become another choking point for the industry,” said Marrero. “Communities try to negotiate, they go back and forth, and hold you down for a bunch of criteria. We’ve been very transparent and said, ‘we’re going to go for the maximum allowable benefits for the community by law in terms of impact fee, and if you sign here, you have a host-community agreement; we don’t become an impediment in the process.”

Morse agreed. “There have been communities that have tried to go above the state law in terms of percentage of annual revenues or have tried to negotiate for various line items such as a new fire truck,” he explained. “They say, ‘in addition to the percentage, you need to give ‘X’ amount to this nonprofit every year.’ We have a standard document, so it’s not intimidating in that sense; the burden is really on the companies to get through the state regulatory process — the local process shouldn’t be an additional burden to bear.”

Holyoke’s willingness not to push for every dollar or every concession, on top of its many other selling points, including available mill space and lower utility costs, have certainly caught the attention of the cannabis industry.

“There is political openness and stability to the industry, which is very valuable,” said Marrero. “We were, if not the first, one of the first handful of communities that had a permissive ordinance in place, so we were first to market on the government side to say, ‘we’re open to this business.’

“They saw the mayor’s advocacy, and they saw that the operational costs would be lower, and that is very, very significant,” he went on. “The energy savings alone … you can save 40% on your energy costs.”

This attractive package has attracted a number of interested parties, said Marrero, noting that two additional cultivators, East Coast Farms and Solurge, are working their way through the permitting process. Overall, a total of 15 host-community agreements have been executed, and seven special permits have been issued. Within a year, it is expected that another two or three cultivation facilities could be doing business in the city, and other types of cannabis-related businesses as well.

And as the cluster grows, it gains momentum and recognition, which fuels additional opportunities. Marrero drew some comparisons to Detroit (the car industry) and Silicon Valley (IT).

“The industry has to train a workforce on how to grow these plants and clip these plants, and as that workforce develops locally, other companies know they can locate in Holyoke and they will have an accessible workforce,” he explained. “They will have access to other vendors that know how to provide services or provide goods to cannabis companies.”

Marcos Marrero

Marcos Marrero says a cannabis cluster is bigger than the sum of its parts.

Building Momentum

As noted earlier, though, cannabis is just one of many intriguing economic-development-themed stories being written in what is still called the Paper City.

Others include everything from the culinary arts center and the sum of the Cubit Building’s many parts to ongoing evolution of the Holyoke Mall — one of the city’s main draws and largest employers — in response to a changing retail landscape; from redevelopment of two municipal properties — the former Lynch Middle School and the Holyoke Geriatric Authority building — to entrepreneurial-ecosystem-building efforts that are bringing new businesses, and jobs, to the city.

At the mall, as stores large and small shrink or disappear from the landscape (longtime anchor Sears closed its Holyoke store a few months back) and those that remain operate with a smaller footprint, the facility is changing its look and adding more entertainment-related businesses, said Marrero.

These includes more restaurants, a bowling alley, and a planned movie-theater complex, he said, adding that, overall, the mall is responding proactively to a changing retail scene.

“They’ve been very resilient … retail is changing, and the mall is putting a much greater emphasis on entertainment and making it more of an experience rather than just shopping,” said the mayor. “Whether it’s the escape rooms or the kids’ center or the laser tag and bowling alley, it’s about creating experiences.”

Meanwhile, additional retail will be coming to the city with redevelopment of the former Lynch School, located just off I-91, by the Colvest Group. The property is slated for demolition later this year, and the expectation is that it will become home to several retail outlets.

Reuse of a different kind is slated for the Geriatric Authority property, which closed several years ago. Indeed, Baystate Health and US HealthVest have chosen the site for its planned 70,000-square-foot behavioral-health hospital.

Plans calls for 120 beds in a facility that would represent consolidation of some of the existing beds in the region and creation of new beds as well.

“This is a great story of reactivating a site that had once been a money pit for the city, one that was draining almost $1 million of taxpayer funds,” Morse said of the days when the Geriatric Authority was operating was site. “Overall, we have two large, city-owned properties that are being developed, and that represents real progress.”

There is progress on many different levels in the downtown area and especially the city’s Innovation District, the area around the Massachusetts Green High Performance Computing Center, which opened in 2012.

On the municipal side, there will be several infrastructure projects undertaken in the area over the next several years, said Marrero, including street work, reconstruction of one of the canal bridges, and other initiatives.

Meanwhile, the city continues to add jobs and vibrancy organically through entrepreneurship-ecosytem-building initiatives such as SPARK, which recently joined forces with the Massachusetts-based program Entrepreneurship for All, or EforAll, to form SPARK EforAll Holyoke.

The new organization offers a number of programs, including a business accelerator, pitch contests, and co-working space currently being built out on High Street that will be available to program members.

Launched four years ago, SPARK has helped a number of ventures get off the ground or to the next stage, and most of them have settled in Holyoke, said Morse, adding that these startups, in addition to some others started organically, are bringing more vibrancy to the downtown.

He listed a catering venture, a salon now under construction, and a microbrewery on Race Street, among others.

“There are things that are happening organically, and I think these businesses are tapping into the momentum happening in the downtown and the ecosystem they feel here and the support they see,” said Morse. “They feel they can be viable here opening up a catering business or a salon or a brewery in downtown Holyoke.”

Marrero agreed. “We’re tilling our own soils, and stuff grows,” he said, referring to organic growth of the business community. “Every now and then, a business moves here, but a lot of this is organic.”

And these businesses are helping to fill more of those vacant or underutilized properties.

“We’re seeing this dynamic where more square footage is coming online,” said Marrero. “It’s being rehabilitated and filled by these businesses.”

As for the culinary arts center and the Cubit Building on the whole, it is bringing many different constituencies to the Innovation District area, adding to this vibrancy there. These include college students, their professors, those attending functions, and, yes, Morse himself, who has signed up for two night classes, one on how to make macaroons, the other involving a chiffon layer cake.

After those, he’ll be even better suited to answer the question, ‘what’s cooking in Holyoke?”

That’s a Wrap

As he was wrapping up his walk through the city with CBS, Morse told the reporter that it would be a good problem to have if the cannabis industry so embraced Holyoke that it found itself running out of commercial space for additional ventures.

That’s not likely to happen anytime soon (1.5 million square feet is a considerable amount of inventory), but a cannabis cluster appears to be no longer a goal but a reality. How quickly and profoundly it develops remains to be seen, but Holyoke appears to be well on its way to having history repeat itself on a certain scale.

A name change probably isn’t in the cards — ‘Paper City’ will stick — but a new era in the city’s history is certainly underway.

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

Features

About the Judges

A panel of judges was kept quite busy over the past few weeks, reading, evaluating, and eventually scoring nearly 200 nominations for the Forty Under 40 Class of 2019.

Yes, that’s a record, and it’s a clear indication of how coveted that designation ‘BusinessWest 40 Under Forty honoree’ has become within the 413.

Who will be most recent 40 people able to add that line to their résumés? The judges are concluding their work, and the letters alerting the winners should be going out sometime this first full week in March. They will be announced in late April, and the gala is in June at the Log Cabin.

To say the judges had their hands full this year is an understatement. But it is a very capable group that includes one previous winner, representatives of a number of business sectors, and a few players within the burgeoning entrepreneurship ecosystem within the region. Here are the judges for this year’s competition:

Michael Buckmaster

Michael Buckmaster

Michael Buckmaster, vice president of Commercial Banking for Community Bank, N.A. He has more than 30 years of experience within the banking industry working for a wide range of institutions, from global market leaders in corporate and investment banking in The U.K. to U.S. regional and community banks within the areas of small-business and middle-market commercial lending. Current specialties include commercial banking loan origination and relationship management for small and medium-sized businesses, and commercial investment real-estate financing within the New England region.

He serves as board president for Hartsprings Foundation (an affiliation of Big Brothers Big Sisters of Hampden County), and as a board member for Big Brothers Big Sisters of Hampden County and for the East of the River (ERC5) Chamber of Commerce.

Kristin Leutz

Kristin Leutz

Kristin Leutz, CEO of Valley Venture Mentors (VVM), a nonprofit organization based in Springfield offering mentorship, startup accelerators, and co-working space to build the innovation economy in Western Mass., and 40 Under Forty honoree in 2010.

Previously, she was the director of Development for RefugePoint, an innovative NGO, working to help at-risk refugees by improving humanitarian systems. She also consulted with the global philanthropic membership organization Women Moving Millions, creating strategic communications to catalyze unprecedented resources for women and girls. Before that, she served as vice president for Philanthropic Services at the Community Foundation of Western Massachusetts, where she led donor services, professional advisor engagement, fundraising, and communications.

She earned a master’s degree in industrial/organizational psychology from Springfield College, a bachelor’s degree from Colgate University, and her yoga teacher certification from Kripalu.

Julie Quink

Julie Quink

Julie Quink, CPA, CFE, managing principal of the accounting firm Burkhart Pizzanelli, P.C.

A graduate of Elms College with a bachelor’s degree in accounting, Quink joined the firm in 2011. She is involved in the accounting and consulting aspect of the practice and manages engagements of various sizes and complexities. She also performs services relative to forensic and fraud-related engagements.

Quink is a member of the American Institute of Certified Public Accountants, the Mass. Society of Certified Public Accountants, and the Assoc. of Certified Fraud Examiners. She is licensed to practice in the Commonwealth of Massachusetts and is a certified fraud examiner.

Active in the community, she serves in a number of boards for the Quaboag Hills Chamber of Commerce, Baystate Wing Hospital, and Square One. She’s also a member of the School Committee of Pathfinder Regional Vocational Technical High School.

Christina Royal

Christina Royal

Christina Royal, president of Holyoke Community College. Royal is the fourth president of Holyoke Community College and the first woman to lead the school since it was founded in 1946.

She holds a Ph.D. in education from Capella University and a master’s degree in educational psychology and a bachelor’s degree in math from Marist College.

She sits on the boards of directors for the United Way of Pioneer Valley, the Mass. Technology Collaborative, and the American Assoc. of Community Colleges’ Commission on College Readiness. 

Before coming to HCC in January 2017, she served as provost and vice president of Academic Affairs at Inver Hills Community College and previously as associate vice president for E-learning and Innovation at Cuyahoga Community College in Cleveland and director of Technology-assisted Learning for the School of Graduate and Continuing Education for Marist College, her alma mater. 

Gregory Thomas

Gregory Thomas

Gregory Thomas, executive director and lecturer at the Berthiaume Center for Entrepreneurship. He works with constituents on campus and throughout the Commonwealth to develop and execute partnerships while also teaching courses in entrepreneurship and innovation.

A 1991 UMass Amherst graduate, Thomas held senior-level global roles in his more than 20 years with Corning Inc. In his last five years at Corning, he was a strategist in the Innovation Group. He is also the immediate past president of the UMass Amherst Alumni Assoc. board.

Cover Story

Century Unlimited

Jeb Balise

Jeb Balise stands in one of the company’s car washes, this one on Riverdale Street.

Some time in 1919 — when, exactly, no one really knows — Paul Balise went into business for himself repairing automobiles and selling them on the side. Today, that company he founded is one of the largest auto-dealer groups in New England and one of the 50 largest in the country. But in most all ways, it’s still doing business the same as it was when Woodrow Wilson was in the White House.

As he flipped through the large photo albums he helped assemble, Bobby Balise moved slowly and methodically, stopping at each page, and sometimes each image, to offer a little commentary.

That’s because every item in the collection helps tell a story that’s now 100 years in the making.

There’s the picture of the small repair garage in Hatfield where it all began. There are photos of the family’s farm and some of the animals raised there. Moving ahead a few pages, there’s a sales receipt from 1936 for a three-year-old Chevrolet Town Sedan sold to a William Bolack, sticker price $410 ($50 was given for a 1929 Ford that was traded in). Little did he know the transaction would become a piece of family history.

Honda models mingle with Chevys in the early 1970s.

Paul Balise’s used car business on Front Street in Chicopee

Paul Balise’s used car business on Front Street in Chicopee

Flipping a few more times, Balise came to a grainy copy of a newspaper photograph, an aerial shot showing the Chevrolet dealership on Columbus Avenue, the York Street Jail across the road, and other buildings in Springfield’s South End — including dozens of homes that would be torn down years later to make way for I-91 — standing in more than three feet of water after the hurricane of 1938.

And then, a few more pages in, there’s a photo montage of that day in 1954 when the Budweiser donkeys came to Springfield. That’s right, donkeys. Apparently they were used in addition to the famous Clydesdales to pull the wagon used in promotions for the beer maker. There’s a photo of the team passing that same dealership on Columbus Avenue and then another of them in the showroom. Balise explains:

“They were going to tour the South End of Springfield and the restaurants down there and entice people to buy more Budweiser. The story goes that they were supposed to stay at the stables across the street where the town had the horses for the garbage collectors. But something fell apart, there wasn’t enough room, the horses didn’t get along with donkeys, I don’t know what, but my Uncle Paul said they could house them in his showroom.”

The Budweiser mules came to Springfield in 1954 and bedded down for a night at Balise Chevrolet, one of the more intriguing pages from the company’s long history.

The Budweiser mules came to Springfield in 1954 and bedded down for a night at Balise Chevrolet, one of the more intriguing pages from the company’s long history.

‘Uncle Paul’ is Paul Balise, founder of the company now known as Balise Motor Sales. He grew up on a farm, as noted earlier, but gravitated toward repairing and selling farm equipment, and then, as they became more popular, automobiles, said Bobby, whose business card reads ‘parts inventory manager’ for Balise Honda, but whose unofficial title is company historian, a role he relishes, to put things mildly.

Paul Balise started with an auto-repair business called the Square Deal Garage and sold cars on the side, his nephew went on. Later, he established a used-car business on Front Street in Chicopee and would eventually become a Chevrolet franchise dealer. He moved to Main Street in Springfield before talking a big leap and leasing — and then buying — the lot on Columbus Avenue that Balise Hyundai still stands on today (much more on all this later).

He was succeeded by his son, Jim, and then his grandson, Jeb, as president and dealer, and over the past few decades, Balise has grown to be the largest dealer group in this region, one of the largest in New England, and among the 50 largest in the country.

Summing up the first 100 years quickly and succinctly, Jeb Balise said that, starting with the garage in Hatfield and continuing with his grandfather’s risky decision to buy the Williams Dodge property on Columbus Avenue, his father’s gambit to sell a little-known Japanese car called Honda at the Chevy dealership, and carrying on today with Balise car washes and a host of auto-related businesses, the company has seized opportunities when and where it could with an eye toward staying on the cutting edge of an always-changing business.

“Starting with my grandfather, we’ve been entrepreneurial and always looking for better ways to serve the customer,” he said, adding that it has been this way since 1919.

When, exactly, in 1919 no one really knows, said Bobby Balise, adding that the company that has become one of the most recognizable brands in this region had a rather informal beginning.

And there are some other dates and miscellaneous bits of information that remain question marks, such as the precise location of that dealership in Chicopee.

But a great deal is known, he went on, adding that much of the company’s history has been chronicled in some form, and over the course of a year-long centennial celebration, the company will try to tell some of that history.

While doing so, it will write some new chapters and add more images to the albums — figuratively if not literally, said Jeb, adding that, in this age of consolidation within the industry, the Balise company is only looking toward what it will take to be around another 100 years.

History Lessons

Alex Balise McEwen, Jeb’s daughter and fourth-generation member of the Balise leadership team — she’s the marketing manager — told BusinessWest that the company is still piecing together plans for how and when it will mark the centennial.

“This will be a year-long celebration,” she noted, adding that, in addition to bringing back the familiar ‘You’ll Do Better at Balise” slogan, radio commercials and other forms of marketing are noting that the company is commemorating 100 years of doing business in this region.

Alex Balise McEwan, fourth-generation member of the Balise leadership team

Alex Balise McEwen, fourth-generation member of the Balise leadership team, says the company will celebrate its centennial throughout the year and in many different ways.

This business has certainly come a long way since the Square Deal Garage, and there have been many individuals and milestones of note, she went on, and the company will use various methods to tell those stories — such as the back wall of the area of the service department at Balise Honda where customers would pick up their vehicles after the work was done. There, several photos and types of imagery have been placed that help tell the story of this particular dealership.

There’s a large photo of Milton Berman, founder of Yale Genton, the large clothing store that once stood on the property at the south end of Riverdale Street, as well as a photo of that store. But most of the others are related to the Honda brand and Jim Balise’s somewhat risky but ultimately rewarding decision to sell the small Japanese cars.

Indeed, there’s a window sticker for a 1971 Honda model; the price was $1,775. There’s also a photo taken in 1972 in Forest Park showing Jim Balise and several of his colleagues standing behind a both a two-cylinder Honda and an eight-cylinder Chevy Impala. And then, there’s a large color photo of the 1973 Honda Civic, the car that changed the fortunes of not only that carmaker, but maybe the Balise company itself, said the company’s historian.

“During the 1973 gas crisis, we had a Chevrolet getting eight miles per gallon, and we had the Chevy Vega, which was supposed to be the savior of the American car industry, and what happens — the engines start blowing up on them,” Bobby Balise recalled. “All we had left besides the Chevys in the showroom was this little Honda Civic, which got great gas mileage; I really believe that saved the franchise to have the foresight to have two car lines.”

There have been many other fortuitous gambles and hard decisions made over the past 100 years, and by each generation, said Jeb Balise, who particularly likes telling stories about his grandfather, who he described as his best friend growing up.

“During the 1973 gas crisis, we had a Chevrolet getting eight miles per gallon, and we had the Chevy Vega, which was supposed to be the savior of the American car industry, and what happens — the engines start blowing up on them. All we had left besides the Chevys in the showroom was this little Honda Civic, which got great gas mileage; I really believe that saved the franchise to have the foresight to have two car lines.”

Recently made part of the inaugural class of the Massachusetts State Automobile Dealers Association’s New Car Dealer Hall of Fame, Paul Balise was a very hands-on manager who spent his career doing what he was doing at the start — fixing things, said Jeb, as one of his favorite stories about his grandfather reveals.

“It was the mid-’70s, I had just started working for my father, and we needed an electrician for … something, I don’t remember what. So we got an electrician, and they did the repair,” he recalled. “A week or two later, my father comes down with the bill, which was reasonable, and says, ‘what are you doing? — your grandfather does all the repairs around here.’

“It wasn’t to save money,” he went on. “That’s what my grandfather did; at 80, he was still a mechanic slash repairman slash everything else.”

Overall, what he did was set a tone, not just with his work ethic but with his ability to visualize opportunities and seize them.

Driving Forces

Slicing through the long history of the company, both Jeb and Bobby Balise said the decision to move off Main Street and eventually buy the Williams Dodge property on Columbus Avenue was a watershed moment and one that in many ways set the tone for all that was to follow.

“Paul knew he had to move off Main Street because there wasn’t enough room for cars and storage, and he took a gamble and bought that building,” said Bobby, whose father worked alongside Paul for many years as parts manager. “He hesitated on it, and with good reason; it was the height of the Depression, and no one knew what was going to happen and how long it was going to last. But he did it, and proved out to be a spectacular location for him, which we still own today.”

Bobby Balise is the Balise company’s unofficial historian

Bobby Balise is the Balise company’s unofficial historian, a role he’s carried out with great enthusiasm for almost a half-century.

Jeb agreed, and siad the deal might not have happened if his grandfather was left to his own instincts.

“The bank shows up and has a meeting with him and says, ‘Paul, we want to put you in this location,’” he said, recalling the stories told to him about a lease that would be for $600 a month. “My grandfather says he can’t afford it, and those at the bank say, ‘we’ll make sure you can afford it.’

“When the recession was over, the same bankers said, ‘Paul, we’re going to sell you the dealership — it’s time for you to buy it,’” he went on. “Again, he said, ‘I can’t afford it,’ and they basically said, ‘we’ll make it so you can afford it’; it was all on a handshake.”

Moving quickly through the past 40 years of the company’s history — the part less chronicled in those albums — the Balise name moved well beyond Springfield and Chevrolet, starting with that Honda franchise.

Today, the company has 21 new- and used-car dealerships in Western Mass., Rhode Island, and on Cape Cod, and a host of nameplates, foreign and domestic, including Chevy, Ford, Chrysler, Buick, GMC, Honda, Toyota, Nissan, Hyundai, Mazda, Kia, and many others.

And, as noted, it has diversified with collision-repair shops and car washes.

Diversification is necessary, he said, because Balise, with all the nameplates it sells, has more than adequate coverage in this region when it comes to sales. Opportunities for continued growth, therefore, lie more in other businesses related to the car.

But there are opportunities to add dealerships in other markets, including Rhode Island and Connecticut, he said, adding that the company is always looking for new opportunities.

Paul Balise moved his Chevy dealership to Columbus Avenue at the height of the Great Depression

Paul Balise moved his Chevy dealership to Columbus Avenue at the height of the Great Depression, a risky move that set the tone for successive generations of company leadership.

As he carries on the work of the generations that came before him, Jeb Balise said he learned a lot from both his father and grandfather — about the car business, yes, but more about business in general.

“They taught me about how to treat people,” he explained. “They genuinely cared about doing the right thing and helping people. That sounds cliché and corny, but that’s how they were.”

Those thoughts stay with him today as he leads an auto group at a time of ongoing change and consolidation — a time when repair of vehicles is just as important a part of the business — and one with better margins — than new-car sales.

“The level of competition is actually greater because they’re bigger dealerships and the throughput per dealership is much higher, which really helps the consumer because it means you have better selection wherever you end up. Between the Internet and technology and the level of competition with other dealers, it’s never been easier to buy a car.”

In that respect, not much has changed in 100 years, he said with a laugh, adding that, in most all other ways, the landscape has changed considerably.

Especially with regard to consolidation. Indeed, while the days of the single-franchise dealer are not officially over, they are certainly numbered.

“Consolidation continues, and bigger auto groups are getting even bigger,” he explained. “And the level of competition is actually greater because they’re bigger dealerships and the throughput per dealership is much higher, which really helps the consumer because it means you have better selection wherever you end up. Between the Internet and technology and the level of competition with other dealers, it’s never been easier to buy a car.”

There’s still plenty of room for more consolidation, he went on, adding that single dealerships are being bought by groups, and groups are being bought up by bigger groups.

“There’s a lot of buy-sell activity still happening at this period of time, and it usually starts happening when the market gets a little tighter,” he went on. “It’s caused by a few things — retirement age, getting tired, not having kids in the business who want the business, and other factors.”

Balise will not be one of the companies bought up by a larger group because it has no intention of being an acquisition target, said Jeb, adding that he rarely if ever even gets an inquiring call, because those who might pick up the phone know there’s no point in doing so.

“The goal is that we keep it a generational and growing business,” he explained. “We pride ourselves on being a significant part of the communities we operate in, and making a difference — in the lives of our associates as well as the customers and the general community.”

Past Is Prologue

As he continued flipping through the photo albums, Bobby Balise stopped at a page with a curious but poignant collection of items.

One is a photo of the company’s first tow truck, or wrecker, as they were called in those days — a 1948 Weaver with a three-ton boom and a hand crank. It’s symbolic of how the company has always been about more than merely selling cars.

There’s also a photo of James Balise looking not into the camera, but toward what the caption describes as “the unknown future.”

The caption under this photo from the company’s archives reads ‘James Balise looks into the unknown future — 1947.’

And then, there’s a recounting of what was said to Paul Balise by friend Bob Johnston as the two were playing a round with others on the recently opened Franconia Golf Club in Springfield and Paul was expressing considerable anxiety over his decision to buy the vacant auto dealership on Columbus Avenue.

“The clouds you so much dread are rich in mercies and shall break in blessings on your head,” Johnston supposedly said.

That’s a prescient thought and a harbinger for a company that has seen the sun shine on it over the years, but also has been able to make it rain — in all kinds of ways.

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