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A Breed Apart: Antonacci Family Continues to Bring Businesses to the Winner’s Circle

Frank M. Antonacci with ‘Lindy the Great.’ Frank M. Antonacci with ‘Lindy the Great.’

In the early 1950s, Guy ‘Sonny’ Antonacci started a sanitation business with a single truck. That venture has evolved into a diversified, multi-generational family business that includes a horse-racing farm, a family-entertainment facility known as Sonny’s Place, and a country club in Hampden known as GreatHorse. Each component of this conglomerate was the product of vision, entrepreneurial spirit, hard work (lots of that), and some luck. For their ability to breed winners — at the track and in business — the Antonacci family has been named BusinessWest’s Top Entrepreneurs for 2018.

Frank M. Antonacci was asked to talk about his grandfather, the late Guy ‘Sonny’ Antonacci, and put his life and entrepreneurial spirit into some kind of perspective.

It was a straightforward request, but Frank M. (the M is to distinguish him from his father, Frank A. — “I’m not a junior, and he’s not a senior”) paused and then struggled somewhat as he searched for the words and phrases to get the job done.

“He was … a special man,” he said finally. “He was a visionary; he was incredibly spiritual, but tough. He was incredibly kind, yet aggressive.”

Frank’s cousin, Guy, named after his grandfather, obviously, agreed, and also put the word ‘visionary’ to heavy use.

“He would see things 20 years before anyone else would,” he told BusinessWest. “He wanted to get in the bottled-water business in the ’70s with my father and uncle, but they asked him, ‘who’s going to pay for a bottle of water?’ He’s laughing up there now, that’s for sure.”

It was Sonny who started a trash business in New York, back roughly 65 years ago, with a single truck named the ‘Mary Anne,’ after his wife. With that one truck — more or less — he and subsequent generations would go on to build a number of successful, high-profile businesses, including the enterprise that sprang from the Mary Anne, USA Waste & Recycling, one of the largest companies of its kind in the region.

There’s also a horse farm, Lindy Farms in Somers, that has bred and trained a string of champion trotters; Sonny’s Place in Somers, named, obviously, after the patriarch, a huge and continually growing family-entertainment venue that now includes everything from miniature golf to ziplining to a century-old carousel (more on it later); and, last but not least, GreatHorse, the high-end private golf club created on the site of the old Hampden Country Club but looking nothing much like its predecessor; in a nod to Lindy Farms, there are horse references throughout, right down to the banquet hall, named the Starting Gate.

 

Guy, left, and Frank Antonacci Guy, left, and Frank Antonacci stand by a photo of their grandfather, ‘Sonny,’ in the lobby of USA Waste & Recycling.

As we examine this stable of successful businesses (yes, that’s the first of many horse and racing terms you’ll read), we’ll start by going in the wayback machine to July 1969 and, more specifically, a Sports Illustrated article (printed in an issue with Vince Lombardi on the cover) chronicling the meteoric rise of a horse called Lindy’s Pride, bought for $15,000 by Sonny Antonacci and several cousins.

All of whom, the SI writer recalled, grew up working on ice trucks before they worked on garbage trucks, and struggled for many years to build the business.

“We’re still down to earth,” a different Frank Antonacci, Guy’s cousin, told SI as their horse was preparing to race in the prestigious Hambletonian, the number-one prize in harness racing, which he would win. “We’ve all been working since we were 13; we know what a buck is. Today … there’s not one of us who’s not successful. We’ve been lucky.”

Maybe. But in many respects, this family has made its own luck, and continues to do so today. Indeed while it’s easy to say that all of this — and ‘all’ means the horses, the go-karts at Sonny’s Place, and the country club — was born of New York trash. But in reality, it was all born of an entrepreneurial spirit and an ability to see something that wasn’t there before.

Indeed, Sonny’s Place was formerly a ramshackle driving range, said Guy Antonacci. “There were days when we’d see maybe a few people come in; it was like that driving range in Tin Cup, with a pink 1960 Volkswagen Beetle out front,” he recalled, making a reference to the popular movie starring Kevin Costner, who played a down-on-his-luck golf pro and operator of a range frequented by more armadillos than duffers.

And Hampden Country Club was essentially dying on the vine when the family bought it a decade ago and decided, eventually, after an initial attempt at a mere makeover, to transform it into the most luxurious, and exclusive, club in the region.

Sonny’s Place, the elaborate family-entertainment complex in Somers, now stands on the site of a little-used driving range likened to the one in the movie ‘Tin Cup.’

For their efforts over the past seven decades or so, the Antonacci family — and yes, that includes Sonny, his brothers, and cousins — have been chosen as BusinessWest’s Top Entrepreneurs for 2018. This amounts to a lifetime achievement award for the family — actually, several lifetimes.

Because today, as decades ago, members of this family stay humble and understand the meaning of a buck — and how to make one as well.

This becomes clear in an extensive interview with Guy and Frank M., chosen spokespeople for a family that knows what it’s like to breed winners — as in horses and business ventures.

Harnessing Entrepreneurial Spirit

There was a light snow falling on Christmas Eve morning, and it lent even more beauty to a place where it abounds — Lindy Farms.

There, Frank M. talked about the business and especially the large, handsome horse called Lindy the Great. A trotter, he enjoyed a successful 2018, winning several races, and on this morning was getting a brushing and some R&R before heading to Florida for the off season.

“We’re still down to earth. We’ve all been working since we were 13; we know what a buck is. Today … there’s not one of us who’s not successful. We’ve been lucky.”

Lindy the Great, 16.1 hands high (not 16.2 or 16.3), by Frank’s guess, is the embodiment — one of many, actually — of the multi-faceted businesses ventures that did, indeed, spring from New York trash.

Our story begins with that trash truck called the Mary Anne and the venture that became known as the South Shore Sanitation. While remaining a relatively small operation, it provided the wherewithal to venture into horses — and much more.

In 1974, Sonny, following a priest who had been reassigned to a church in Somers, moved his family there, said Frank, adding that, while he was ‘retired’ at age 40, he didn’t stay retired for long at all.

He and Mary Anne started Somers Sanitation, again, with one truck (this one didn’t have a name), and quickly grew the enterprise, which now stretches from the Vermont border to Southern Connecticut.

What was originally envisioned as a ‘makeover’ became the total transformation known as GreatHorse. What was originally envisioned as a ‘makeover’ became the total transformation known as GreatHorse.

Today, it boasts five hubs and 16 transfer stations, serving a wide range of businesses and communities in Connecticut and Western Mass.

It was with profits from the trash business that Sonny Antonacci and several cousins ventured into horse racing. Their passion for the sport began when they attended races at Roosevelt Raceway on Long Island, and it went to a much higher and different level when they bought their first horse, named Galahad Hanover, and shortly renamed Lindy’s Pride, in 1967.

That horse would go on to win not only the Hambletonian, but the illustrious trotting Triple Crown, and essentially set a tone for Lindy Farms, named, sort of, after the town of Lindenhurst on Long Island, where the Antonaccis grew up.

Over the years, the operation, now in Somers, Enfield, and Hampden, Mass., has continued its winning ways and expanded on several fronts.

“Until about 15 years ago, it was focused on standardbreds — trotters and pacers,” Frank explained. “But in recent years, we’re expanded into thoroughbred racing, and we’ve had some success there, as well.”

Especially with a stallion called No Nay Never. “He might be the hottest freshman stallion in the world this year,” he said, noting that, as a 2-year-old, he won honors as ‘Thoroughbred of the Year’ in Europe.

The racing business, like the trash business before it, typifies how this family approaches business — by going all in. They don’t just want to be a player in an industry; they want to dominate that industry.

Indeed, horse breeding and racing has become a passion for three generations of family members, and the level of excellence attained becomes apparent in the number of trophies and awards on display at the offices of USA Waste & Recycling.

Sonny Antonacci is considered a visionary when it comes to breeding standardbred racehorses, said his grandson, Frank, and he bred more Hambletonian horses than any individual breeder. In 2001, Sonny, along with his cousin Frank, were elected to the Harness Racing Hall of Fame’s Hall of Immortals.

That racing tradition continued with the next generation, his sons, Jerry and Frank, who have remained active in promoting the industry. Frank is currently director of the Hambletonian Society, which oversees the development, administration, and promotion of the harness-racing industry throughout the country, and he’s also director of the U.S. Trotting Assoc., the governing body of the entire domestic industry.

And Frank M. (known as Frankie to family members) has taken up that mantle. He’s now the head trainer at Lindy Racing Stable and has been making a name for himself within the sport, winning the U.S. Trotting Assoc. ‘Breakthrough Award’ in 2010.

Positive Turns

While there are no trophies, ribbons, plaques, or prize winnings to quantify success in their other business ventures, the Antonaccis’ drive to take the lead — and keep it — in whatever field they happen to get into is clearly evident.

It can be seen with both Sonny’s Place and GreatHorse, which came to fruition the same way the trash and horse-racing ventures did — through vision and a lot of hard work.

And a conversation at the dinner table, said Guy, who vividly remembers this one regarding that old, run-down driving range the family acquired a dozen or so years ago and what might be done with it.

Previous Top Entrepreneurs

• 2017: Owners and managers of the Springfield Thunderbirds
• 2016: Paul Kozub, founder and president of V-One Vodka
• 2015: The D’Amour Family, founders of Big Y
• 2014: Delcie Bean, president of Paragus Strategic IT
• 2013: Tim Van Epps, president and CEO of Sandri LLC
• 2012: Rick Crews and Jim Brennan, franchisees of Doctors Express
• 2011: Heriberto Flores, director of the New England Farm Workers’ Council and Partners for Community
• 2010: Bob Bolduc, founder and CEO of Pride
• 2009: Holyoke Gas & Electric
• 2008: Arlene Kelly and Kim Sanborn, founders of Human Resource Solutions and Convergent Solutions Inc.
• 2007: John Maybury, president of Maybury Material Handling
• 2006: Rocco, Jim, and Jayson Falcone, principals of Rocky’s Hardware Stores and Falcone Retail Properties
• 2005: James (Jeb) Balise, president of Balise Motor Sales
• 2004: Craig Melin, then-president and CEO of Cooley Dickinson Hospital
• 2003: Tony Dolphin, president of Springboard Technologies
• 2002: Timm Tobin, then-president of Tobin Systems Inc.
• 2001: Dan Kelley, then-president of Equal Access Partners
• 2000: Jim Ross, Doug Brown, and Richard DiGeronimo, then-principals of Concourse Communications
• 1999: Andrew Scibelli, then-president of Springfield Technical Community College
• 1998: Eric Suher, president of E.S. Sports
• 1997: Peter Rosskothen and Larry Perreault, then-co-owners of the Log Cabin Banquet and Meeting House
• 1996: David Epstein, president and co-founder of JavaNet and the JavaNet Café

“There were days when we’d have one customer come and spend $8 on a bucket of balls, and we kept thinking, ‘what else can we do with this place?’” he recalled. “My brother and Frankie’s youngest brother were probably about 10, 11, or 12 at the time, and really looking for something that they could grow up having fun at. So we said, ‘everyone loves miniature golf; maybe we should try that.’”

They did, and from those humble beginnings — miniature golf and a food truck with ice cream — new additions have been added seemingly every year since. Go-karts and batting cages came next, followed by a full restaurant, an arcade, a pavilion, rock-climbing walls, laser tag, miniature bowling, virtual reality, live concerts, and more.

The facility has become a destination not just for families, but for a growing number of companies looking to host outings or team-building exercises. The business plan, unofficial in nature, has always been to continually build on the foundation and — in keeping with the tone of those original conversations — keep looking for new ways to utilize a large and highly visible tract of land.

The latest manifestation of this philosophy was the addition, in 2017, of a carousel with a long and proud history and, yes, a number of handsome horses.

Built by the Philadelphia Toboggan Company in 1925, the ride’s first home was Delaware Beach. It then had a lengthy stay at Lakewood Park in Waterbury, Conn., and then, after refurbishment, at Kiddieland Park in Melrose, Ill.

It was languishing in a storage container at Chicago Land when Guy’s father, Jerry, the main driver in the creation and continued growth of Sonny’s Place, found it and concluded that it was the next big piece in the puzzle.

“It’s a work of art, all hard-carved wooden horses and sleighs,” said Guy, noting that it opened for business last August. “We’re having it refinished now, and maybe a third of the 48 horses have been restored; it’s been a labor of love.”

The same can be said of Greathorse, which, like the carousel — and the old driving range itself — was a restoration effort that required some vision, and then some capital and a good business plan.

As Guy — who turned pro and played on a few of golf’s mini-tours before coming to the realization that the big stage was beyond his skill level — recalls the story, the family actually started looking for a golf course to buy nearly 20 years ago to further diversify the family business beyond trash and horses.

The search was put aside, especially as Sonny’s Place was being developed, and then taken up again at the start of this decade, with a number of options in play before settling on the former Hampden Country Club, then heading for the auction block.

“We could see that it had a lot of potential, but also a lot of scars to it,” he recalled. “What sold the place was the view, and we knew that, with some vision and some work, the place could be something.

“I’d be lying if I sat here and told you when we bought the place we had the grand vision of doing what we did,” he went on, noting that a mere facelift was the original plan. “But as we got into it … as Frankie has said, we really don’t half-ass anything; everything we do, we do to the best of our ability.”

Spring in Their Step

Frank M. says he can’t recall not being in business or entrepreneurial.

Indeed, while he was involved with the family businesses, in some capacity, since he was teenager, he was also looking to hang out his own shingle, and did, at age 15.

The venture — born from another of those Sunday afternoon conversations at the dinner table — was called College Bound Cleanups, a “concierge-type service for old ladies who needed their basement cleaned out, or their garage.

“It was a summer kind of thing,” he recalled. “I brought in a partner who was 16 — I needed someone with a driver’s license — and we had a little dumptruck and did cleanups. We had a little ad in the Reminder, and we did OK for ourselves.”

Like the generations that came before him, he added, noting that he eventually put his own venture aside and focused on horses and trash, sometimes in that order, sometimes the other. And there was, and is, always talk about new opportunities and paths to go down, like Sonny Antonacci projecting a need for bottled water.

“Business … it’s part of every conversation we have,” said Frank, referring to the family’s entrepreneurial DNA and a passion for finding and developing new business opportunities. And these traits have been passed down from one generation to the next. Frank can even see it in his young children.

“I drive around with my kids, we’ll go past various strip malls, and they’ll look to see if it’s the good guys or the bad guys picking up the [trash] containers,” he said. “I see it my older son [age 7] already; he’s trying to understand how business works.”

Within the Antonacci stable of enterprise, business works maybe a little differently than in most places, said the third-generation spokespeople.

“What people have a hard time understanding about our business and our family is that it’s different — I call it ‘sloppy,’” said Frank, who understood that he needed to explain that term and did.

“We’re not very structured,” he told BusinessWest. “The way we do things is a little unorthodox, and there isn’t the bureaucratic organization you see in other businesses or families. People will say, ‘what’s your title?’ or this or that. It’s a lot looser than that.”

‘Loose.’ ‘Sloppy.’ ‘Unorthodox.’ Whatever it is, it seems to be working, and in the traditionally challenging setting of a multi-generational family business, or set of businesses, to be more precise.

There are actually four generations still involved. Indeed, Frankie and Guy said their fathers, Frank and Jerry, have breakfast with their mother every morning. “And they’re probably running things by her every day,” said Frank M.

The second generation, as noted, remains passionate about all aspects of the business operation, but especially the horse breeding and racing, they said.

Meanwhile, there are many third-generation members involved, or soon to be involved, including Guy’s brother Matthew, 24, and Frank’s brothers, Chris and Phillip.

Overall, said both Guy and Frank M., the generations have worked well together, and each has been allowed to make their mark — and their own contributions.

“Our fathers and uncles have allowed us to follow our passions, expand the businesses, and bring our own look and feel,” said Frank. “And to this point, everyone who’s been involved in the businesses has helped them grow and prosper. Why change the formula?”

Why indeed?

At the Finish Line

‘Sonny’ Antonacci never did get into the bottled-water business, his sons having persuaded him that there was no future in it. That’s family lore, anyway.

“His famous line was, ‘you’ll see … bottled water will be more than a gallon of gas,” said Frank M. “And he was right — and that’s just one example.”

Indeed, while the Antonacci family never became part of the multi-billion-dollar bottled-water industry, it has certainly had far more hits than misses. In business, as in harness racing, it has found the winner’s circle far more often than most.

Having capital from the trash business has certainly helped, but so too has been the ability to see other opportunities where others did not, having true entrepreneurial spirit — and, yes, being kind but also aggressive.

‘Sonny’ had all those attributes, and so have the generations that have followed him.

That’s why this family is BusinessWest’s Top Entrepreneurs for 2018.

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

Banking and Financial Services

Developments of Interest

Richard Kump, president and CEO of UMassFive.

Richard Kump, president and CEO of UMassFive.

As the name suggests, the UMassFive College Credit Union was launched to serve employees at UMass Amherst. But it quickly expanded its mission to the other schools in that region, and then beyond employees of those institutions. Today, the process of expansion and evolution continues, and touches many realms, from new branches to new technology to new member sponsors. In short, those humble beginnings have been left well behind.

Richard Kump has spent his entire career in financial services working for credit unions. That includes a lengthy stint at St. Mary’s Bank in Manchester, N.H.

This line on a résumé leads to a story he likes to tell and has told quite often.

“St. Mary’s was chartered in 1909; it was the first credit union in the country, but they didn’t call them credit unions then,” Kump explained. “It was built out of the French Canadian Catholic parish in the west side of Manchester serving the mill workers. They’ve held onto that ‘bank’ moniker without actually being one. It’s a bit of an identity crisis.

“The one bank in town was owned by the mill owners,” he went on. “They had practiced discrimination; if you were a French Canadian mill worker, you couldn’t get a mortgage from them, because they wanted you on their housing plan, which put you right next to the factory in terrible conditions. And that’s why the credit union was created — so those mill workers could pool their nickels and dimes and lend to each other so they could buy homes.”

While Kump likes relating the story of St. Mary’s, he quickly moved on to one he likes telling even more — the one concerning the institution he now leads as president and CEO — UMassFive College Credit Union, or UMassFive, as it’s known. And it’s a compelling story.

Founded in 1967 to serve employees at UMass Amherst, as the name suggests, it has moved well beyond its somewhat humble beginnings. In all kinds of ways.

Starting with the membership. Indeed, while the credit union still serves UMass employees, and those of the other institutions that make up the Five Colleges — Amherst, Hampshire, Smith, and Mount Holyoke colleges — it also serves their current students and alumni. Membership also extends to UMass Medical School in Worcester, where there is a non-traditional branch, and, most recently, Greenfield Community College.

And UMassFive has extended its reach far beyond what might be called academia, through both acquisition and the addition of several new ‘sponsors,’ as they’re called, including CISA (Community Involved in Sustaining Agriculture), River Valley Co-op, several area communities, and Mercy Medical Center in Springfield, where there is another non-traditional branch.

There are five branches in all, serving more than 43,000 members, said Kump, who became CEO last July. Meanwhile, assets, which totaled roughly $135 million when he arrived in 2000 to serve UMassFive as chief operating officer, are now approaching a half-billion; the institution expects to crash through that barrier this year.

Beyond these various forms of growth, a pattern mirrored by many credit unions over the past 20 years or so, UMassFive has changed in other ways, especially with regard to technology, said Kump, who likes to believe his institution is on the proverbial cutting edge in this realm.

As an example, he pointed to the ITM, or interactive teller machine, in the lobby of the main office just off Route 9 in Hadley. The ITMs, which are becoming increasingly prominent in other markets and are just starting to make their mark in this one, essentially replace ATMs. Customers can use one to talk to a real person (hence the name), conduct a wide range of transactions, and get answers to questions.

“This was a time when many financial institutions were burying their heads in the sand and trying to ride out the recession. Instead, we got very aggressive. We took advantage of those times, and it put us on a very firm setting.”

Beyond the ITMs, the UMassFive lobby is distinct because there are no tellers, at least in the traditional sense, said Kump, adding that each location now has banking specialists who take on what he called the ‘universal agent model.’

These individuals can assist customers with a broad range of banking needs, he went on, adding that this requires additional training and higher compensation than traditional tellers, but these are steps UMassFive is taking to better serve customers in these changing, more technology-driven times.

“What we’ve focused on is a marriage of high touch with high tech,” he explained. “We want to be able to provide the convenience of doing everything at your fingertips; at the same time, a lot of folks need help getting that done, so we want to make sure we have the staff who can help someone who is not tech-savvy.”

Meanwhile, another form of growth has been expansion into commercial products and services and development of a unique and now quite strong niche — the financing of residential solar-energy projects (much more on that later).

And while the present tense is intriguing, when it comes to the UMassFive story, there are some new chapters soon to be written, including a new branch in Greenfield, slated to open later this year, and perhaps some additional acquisitions at a time when they are continuing to dominate the landscape with regard to both banks and credit unions.

For this issue and its focus on banking and financial services, BusinessWest talked at length with Kump about how UMassFive continues to build upon its strong foundation and grow its footprint, in every sense of that term.

Dollars and Sense

When Kump arrived at UMassFive in late 2000 after a stint at Cathedral Credit Union in Manchester, the institution was operating out of cramped quarters in a building next to the Hangar restaurant on University Drive in Amherst.

How cramped?

“My office was a supply closet — literally,” he recalled. “Because the roofs were pitched, to get to my desk I had to bend over to go around to the back of my desk.”

The inconvenience was rather easy to tolerate, he went on, because the institution was building its new home in Hadley at the time, and thus those crawls were to be a temporary nuisance.

The new facility would be the first of many positive developments in this century, one that has proven to be a good one for credit unions — at least those with the size, determination, and imagination to cope with many forms of change, from a host of new regulations to rapidly advancing technology.

As he quickly rehashed his own tenure at UMassFive, as well as that of his predecessor, Kathy Hutchinson, who served the institution for more than four decades, Kump said UMassFive, and all credit unions, for that matter, greatly benefited from both the Great Recession of a decade ago and the ongoing consolidation of the banking industry.

The ITMs installed by UMassFive allow customers to see, and interact with, an employee of the credit union.

The ITMs installed by UMassFive allow customers to see, and interact with, an employee of the credit union.

Elaborating, he noted that, as the recession was escalating and the stock market was collapsing, individuals were looking for a safe place to park their money. And many found one in the local credit union.

“During the early part of the recession, we saw unparalleled growth; we had three consecutive years of double-digit asset growth, including one year with more than 20% growth,” he recalled. “There was a lot of money coming out of the market, and it needed go somewhere safe. Meawhile, there was a lot of national bank disenfranchisement — there were ‘close-your-bank-account’ days and people protesting in front of Bank of America.

“This was a time when many financial institutions were burying their heads in the sand and trying to ride out the recession,” he went on. “Instead, we got very aggressive. We took advantage of those times, and it put us on a very firm setting.”

While this was going on, UMassFive, which has what’s known as a multi-sponsor charter (instead of a single sponsor or employer), as opposed to the more common community charter, was also taking on new sponsors, such as CISA and River Valley Co-op, that have brought many new members — and opportunities — to the institution.

“Some of the sponsors we’ve taken on recently have really been formative to our plans,” he explained. “We’ve found more members through our relationship with CISA than we have through the University of Massachusetts over the last couple of years. That’s because people who can’t join the credit union any other way join CISA, and then they’re eligible for UMassFive.”

While growing membership, the credit union has also recently been expanding its portfolio of products and services, especially on the commercial side of the ledger, specializing in loans for equipment and commercial real estate. The move was a synergistic one, said Kump, noting that many members own businesses or commercial real estate, specifically multi-family housing, and it has created many new opportunities to grow the institution.

“It was symbiotic — we felt we could help our members who had those commercial needs with a level of service we felt could compete very favorably, especially with some of the larger regional and national financial institutions,” he explained. “And at the same time, it develops a wonderful asset for the credit union.”

By All Accounts

Echoing business owners and managers across virtually all sectors, Kump said the pace of change is too great, and the number of potential disruptors on the horizon way too high, for institutions like his to write a traditional five-year plan.

Three years is about the outside for any strategic plan these days, he went on, adding that the latest such document crafted by those at UMassFive doesn’t contain any real secrets — simply ongoing expansion of current initiatives and a focus on continued, sustainable growth, because in the financial-services sector today, size — for banks and credit unions alike — really does matter because of the economies of scale it provides.

The Greenfield branch, a traditional facility, like the one the institution operates in downtown Northampton, will be perhaps the most visible — and costly —avenue of growth, he said, adding that expansion into that Franklin County community is a natural progression for UMassFive and a vehicle for better serving customers such as those at GCC and those in or related to the agriculture sector sponsored by CISA.

“This move has been in the planning stages for some time,” he said, adding that, in recent years, the credit union has been focused on other infrastructure initiatives, such as renovation of both the main office and the Northampton branch. “Now, it’s a matter of looking outward a little bit more.”

This new branch will be like the others the institution operates, he said, referring to the leading of edge of technology.

“We don’t build cookie-cutter branches; we’ve gone through branch metamorphosis the past few years,” he said, referring not only to the ITMs — which are now in drive-throughs as well as branch lobbies — but the personnel staffing these branches.

“We eliminated all tellers more than two years ago, because fewer and fewer of the transactions are coming to the branches,” he explained. “People are using mobile, they’re using online banking … they don’t have a need to come to the branch. But when they do come to the branch, it’s for something important.”

Which brings him back to that ‘universal agent,’ a phrase he uses, although he admits he’d like some better terminology.

“We’ve created a position where the individual has the knowledge that a branch manager would have in years past,” he explained. “They can help someone regardless of what they’re looking for.

“To make all this work, our hiring practices are much different,” he went on. “More of our hires have no banking experience than have banking experience, and what we’ve found works very well for us is that we hire people who are outgoing and care — they just want to help someone else.”

With the changes in technology and hiring strategy has also come a deeper commitment to training, a necessity if the machines and the people are going to properly serve the members, he continued.

“We’ve tripled our professional-development budget over the past three years,” said Kump. “And that’s because we’ve put a big onus on the employee in the branches; they have to know so much. They’re not the specialist anymore.”

Meanwhile, the institution will continue efforts to expand on the commercial side of the ledger and the solar-lending realm as well, he said, adding that UMassFive has already created quite a niche with such transactions.

“In three years, we’ve become the highest-volume residential solar lender in the Commonwealth,” he noted, adding that UMassFive has written more than $45 million in loans covering roughly 1,400 residential, and now commercial, solar projects.

And they’re being written for members across the state, he said, adding that solar installers are recommending the institution to people well outside the 413, many of whom have become members through membership in CISA.

Past Is Prologue

Returning to Manchester, N.H. and the credit union called St. Mary’s Bank, Kump said it was formed 110 years ago to serve the underserved.

“Hopefully, there’s still a lot of that left in that industry,” he said, adding that there’s quite a bit of it at UMassFive.

The institution’s unofficial slogan, put into use by Hutchinson, is “every member, every day.” That’s where its focus is and where it will stay, Kump said, even as it keeps adjusting proactively to new challenges and constant change.

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

Health Care

Lean — But Not Mean

Mark Fulco in the ‘Mission Control’ room at Mercy Medical Center.

Mark Fulco in the ‘Mission Control’ room at Mercy Medical Center.

‘Lean.’ ‘Six Sigma.’ ‘Gemba walks.’ These are terms and phrases, used traditionally on manufacturing shop floors, in relation to continuous improvement initiatives and efforts to take waste out of processes. Today, they’re being heard more in the healthcare realm, and especially at Mercy Medical Center, where efforts are ongoing to improve efficiency without impacting quality of care.

The sign on the door says ‘Mission Control.’

That’s a play on words, obviously. There’s a definite nod to NASA and its famous control room, where decisions were made, and moonshots were choregraphed. But that word ‘mission’ takes on a different, higher meaning at Mercy Medical Center, part of Trinity Health Of New England. The hospital was founded more than 125 years ago by the Sisters of Providence, and its mission to care for the region’s population, and especially those who are traditionally underserved, has been paramount and in most ways more important than the bottom line.

But these days, the mission is being carried out in a different way, said Mark Fulco, president and CEO at Mercy, who recently marked a year at the helm. He noted that, in many ways, the hospital, and the Trinity system on the whole, are taking cues from the auto industry and other business sectors and taking a Six Sigma approach to healthcare — a lean approach, one that manifests itself in a number of ways.

But the major focus is on making the medical center more efficient in ways that will reduce costs without sacrificing quality.

“It’s been a watershed for us, because it has changed our work and has helped us focus on key metrics to drive efficiencies.”

“It’s been a watershed for us, because it has changed our work and has helped us focus on key metrics to drive efficiencies,” said Fulco, adding that the hospital’s efforts to become leaner are reflected in everything from reduced wait times in the ER to an increase in the number of discharges over last year by staffing up more beds; from reducing the overall cost of each discharge by roughly $1,100 to cutting back on travel by using videoconferencing technology.

Overall, Mercy and the Trinity system are eliminating waste whenever possible, creating efficiencies in every department, and constantly looking for ways to improve service without impacting quality of service.

This work extends all the way down to the medical center’s printers and copiers, the number of which has declined noticeably over the past year or so.

“We’ve gone very much paperless,” Fulco explained. “We had two big meetings this morning, and instead of printing out huge packets of information, we did it electronically and on large monitors.

“It’s unbelievable what a color copy costs these days, and when you produce lots of color copies with charts and graphs, it costs a lot of money,” he went on. “So we’ve actually taken printers away and put codes on some of our printers so departments are accounting for every color copy they make.”

This focus on lean practices and accountability brings us back to the room behind the door bearing the sign that says ‘Mission Control’ and its co-called ACE (achieving clinical excellence) boards that track progress in specific areas.

They are part of what is now known as the Trinity Health Management System, or lean daily management, an operating philosophy, if you will, that we’ll explore in greater detail later.

It also brings us to the large conference room, also known as the Patient Safety and Flow Room, a few hundred paces away. Here, each day at 8 a.m. (no one is typically late, because if they are, they have to walk into a room filled with people who were on time), as many as 50 people gather for what are known as ‘huddles.’

These are strategy sessions where issues are discussed, problems are identified, and solutions generated, said Fulco, who offered an example.

“We have several huddles every morning, and one of them is our ‘tier 3 huddle,’ where we bring together leaders from across the entire hospital,” he explained. “The very first thing we talk about is patient safety or problems that came up the night before, or safety catches — like if something was a near-miss — because we want to know, first and foremost, what we need to do to be better and keep patients safer.

“That’s our early-warning system,” he went on. “And at the meeting, if we have a detected infection, we report it, and then we talk about what we can do to prevent another case like that from happening.”

For this issue, BusinessWest looks at Mercy’s broad efforts to employ the principles of Six Sigma and become, in keeping with its mission, lean but certainly not mean, at least in a very literal sense.

Work in Progress

They’re calling it the ‘29-minute pledge.’

That number is significant because of its specificity, meaning it’s not the ‘30-minute pledge,’ a much rounder number to be sure.

It refers to the maximum time it will take for someone visiting Mercy’s Emergency Department to see a physician or physician’s asistant, and this pledge is due to be launched in the coming weeks and announced with billboards and other forms of advertising.

“We’re pledging a door-to-provider time, in our emergency room, of 29 minutes,” Fulco explained, adding that the program has essentially been rolled out already, but the billboards won’t be going up for another few weeks. “We chose 29 minutes because it represents an average of what we can hold out as a pledge; there are times when we’ve averaged 16 minutes.”

The 29-minute pledge is a another example of Mercy’s efforts to improve quality of service while also becoming more efficient and taking cost out of the equation, said Fulco, noting that it is one of many initiatives put in place during what has been a very intriguing and challenging (he would use that word early and quite often, and usually with at least one ‘really’ in front of it) first year at the helm — and year for all those who provide healthcare.

He would sum it all up, sort of, by saying, “I knew what I was getting into — I knew it was challenging; it’s just been more work than I expected — not in a bad way, but in a good way, because it’s been a labor of love.”

What he was getting into is a very demanding climate for not just Mercy but all healthcare providers, one in which reimbursements for services provided, especially from public payers including Medicaid and Medicare, do not really come close to covering the cost of those services.

This disparity is especially large in the broad realm of behavioral health, Fulco noted, adding quickly that, through its facilities at Providence Behavioral Health Hospital, the Trinity Health system is the region’s leading provider of such services.

And these are services that are, from a purely bottom-line perspective, losing propositions, again because the cost of care is not being met by those paying for it. And while Providence and the Trinity system have always been mission-driven, there comes a point where the losses being incurred cannot be sustained, said Fulco, adding that this reality explains why there were inevitable cutbacks at Providence, and in other departments under the Mercy/Trinity umbrella as well.

Mission Control is part of an effort to bring the principles of Six Sigma to Mercy Medical Center.

Mission Control is part of an effort to bring the principles of Six Sigma to Mercy Medical Center.

“We had to make some tough decisions — the status quo simply doesn’t work,” he explained, adding that among these decisions were staffing reductions at Providence (most employees were offered other positions within the system) and cutbacks within or elimination of some departments at Mercy, including the Hearing Center.

While the cutbacks and staff reductions garnered the largest headlines regarding the Mercy system in 2018, a considerable amount of work going on behind the scenes to make the system more efficient, more responsive, and, yes, leaner — efforts like the 29-minute pledge — were perhaps more newsworthy.

As he talked about them, Fulco said these initiatives accurately reflect a system-wide operating philosophy being implemented by Trinity Health Of New England’s recently appointed CEO, Dr. Reginald Eddy, a former emergency-room physician.

“He really gets it,” said Fulco. “He gets it from a care perspective, and he has a strong sense of urgency that he’s really instilled in us in terms of doing it right, doing it well, and doing it quick, not just from a patient perspective, but from a business sense.”

Tracking Improvement

As he talked about the Trinity Health Management System, Fulco said it is focused on quality metrics, or what he called ‘people-centered metrics,’ which are carefully monitored with an eye toward continuous improvement.

As an example, he cited the infection rate, a key issue — and major challenge — for all hospitals.

“Our infection rate has remained below target and below what’s expected for a hospital like Mercy, and is, in fact, one of the 20 lowest infection rates across all the 94 or 95 Trinity hospitals,” he said, using infections from urinary catheters as an example of how Mercy tracks issues and addresses problems.

“Our goal is to be an ‘A,’ and we’re not stopping until we get there, and then we have to stay there, which becomes progressively more difficult.”

Steps such as these have a trackable impact on quality, as measured in a number of ways and by a number of entities, said Fulco, noting that Mercy’s Leapfrog score — its rating based on surveys undertaken by the Washington, D.C.-based Leapfrog Group, improved from ‘C’ to ‘B’ in 2018.

“Our goal is to be an ‘A,’ and we’re not stopping until we get there, and then we have to stay there, which becomes progressively more difficult,” he explained. “But we’ve improved by one whole grade, which is a significant step forward.”

But while quality is certainly an important benchmark, so too is cost, said Fulco, adding that the ultimate goal is to not only improve the overall level of quality but reduce the cost of providing care as well.

“On the cost side, because we’ve been more efficient and we’ve tried to tease out unnecessary expense — and there are several buckets of expense, from labor to non-labor — we have reduced the cost per case by more than $1,100 from last November [2017] to this November,” he said. “And when you multiply that by the 1,400 or so discharges we had, that’s a savings of more than $1.5 million.”

With that, he went to his desk to retrieve the current average cost per discharge, $6,850, a number he had handy, and for a reason — it is carefully tracked, and its downward movement is a source of pride within the system.

It’s been accomplished through a number of means, he said, starting with staffing changes (none at the bedside) that result from consolidation in some areas, such as billing, that are made possible by synergies with the regional Trinity team, thus reducing overhead costs.

Further savings have been achieved on supplies, he said, returning to efforts to go paperless when possible, and also such things as travel expenses.

“We work with people; if they’re printing too much, we take steps to reduce that volume,” he said. “It doesn’t sound like much, but it adds up when you’re saving 50 cents or 75 cents on a print; it adds up over time. And it doesn’t contribute anything to patient care, so we’d rather put the money into patient care than into paper.”

As for travel, it has been cut back as well, he said, noting that meetings between the Mercy team and the system team are now staged electronically. “Instead of having our people drive to Hartford or their people drive here, we’re using technology,” he told BusinessWest.

Huddling Up

As he offered a tour of the Mission Control room, Fulco started by referencing several large charts, called A3 charts, on the wall. Each one outlines an individual’s primary strategic aims, and they are part of the hospital’s lean daily management system.

“An A3 is putting our key objectives and measures all on one page,” he said, referencing his own A3, while noting that the charts track progress toward meeting those specific aims and goals, as laid out in an action plan. “We track this every week; we look at this every week. Every member of the leadership team has one of these.”

And when problems arise at those huddles, as he noted several times, everything is measured.

That goes for efforts to address recognized problems or issues as well, he went on, referring to other charts and the four letters ‘P,’ ‘D,’ ‘C,’ and ‘A,’ which stand for ‘plan,’ ‘do,’ ‘check,’ and ‘act,’ the four stages of tackling a problem, as Fulco identified them.

“This is flowing constantly; it’s changing every day,” he said, adding that the PDCA cycle, as it’s called, was created to generate action on a specific matter and keep things moving.

From Mission Control, the tour moved to the Patient Safety and Flow Room, where there was a comparatively small huddle going on (this was late afternoon). For the 8 a.m. huddles, those assembled have an agenda and start with safety, and move on to a daily operating summary and then performance reports — how well the hospital is doing with patient satisfaction, for example. Next is a round-robin session, at which feedback is sought on problems that have been identified.

But the tier 3 huddle is actually the second step in the process, said Fulco, noting that there are huddles on the departmental level as well. Matters arising at those sessions then come before the larger group, and there is then a Gemba walk. That’s a Japanese term that translates, loosely, into going to the front lines to see what’s going on, to hear from the people involved and come to understand the problem; it is similar in many ways to the concept known as MBWA — managing by walking around.

“A Gemba walk is daily rounding — we’re not sitting in our office or around a conference-room table; where going to see things where they really happen. We’re talking to people who are doing the work, and we’re doing some accountability checks,” said Fulco. “From 8:30 to 9:30 we take that walk, and from there we go to the Mission Control room and do an accountability huddle.

“It’s about getting close to the people,” he went on, “and finding out how we, as leaders, can help them.”

To emphasize these points, he concluded the tour in the Emergency Department, where are charts similar to those in both Mission Control and the Patient Safety and Flow Room.

They track things like wait times and numbers of patients who left without being seen — presumably because the wait times were too long — said Fulco, adding that subsequent huddles and PDCA charts identified the causes of those problems and tracked the success of steps taken to address them.

Healthy Outlook

Gemba walks. PDCA cycles. Huddles. A Mission Control room. These names, acronyms, and places all help explain how, while the mission hasn’t changed at Mercy Medical Center and Trinity Health Of New England, the process of carrying out that mission certainly has.

The emphasis today is on continuous improvement and being lean — without impacting the quality of care being provided at the bedside. As Fulco said repeatedly, in this environment, everything is measured, or charted, and progress is marked daily.

There is considerable work still to be done — this process never actually ends, he said — but progress can be seen in the ER, on the bottom line, and on the charts in the Patient Safety and Flow Room.

It could be seen as paper as well — only they’re using much less of it these days. That’s just part of the process of running lean.

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

Cover Story

Forward Progress

 

Forward Progress

Host of Forces Create Momentum
Across the Region  Read More>>>

Running out of Gas?

Analysts Say the Economy Could Be Headed
for a Slowdown Read More>>>

The Employment Picture

With Talent Scarce, Many Employers Are
Laboring to Fill Positions … Read More>>>

Right Place, Right Time

MGM One of Many Factors Spurring
Optimism for Tourism Sector … Read More>>>

Commercial Real Estate

Warming Trend

A confluence of factors — from the opening of MGM Springfield to the dawn of the cannabis era in Massachusetts — have fueled heightened interest in real estate in downtown Springfield. Brokers report that the level of activity — inquiries, showings, leases, and sales — is the highest they’ve seen in recent memory.

Freddy Lopez Jr. says there’s a rather complex algorithm, as he called it, when it comes to locating a cannabis dispensary in Springfield.

Such a facility can’t be within 500 feet of a school, he noted. Or within 300 of another dispensary. Or within 50 feet of a Class A residence. And there are many other restrictions, as well as a host of hurdles to clear locally and with the state, just to get the doors open.

But this rather high degree of difficulty doesn’t seem to be stopping many people from trying to get in the game in downtown Springfield — and at other locations within the city, said Lopez, a broker with Springfield-based NAI Plotkin.

He said he’s lost count when it comes to how many properties he’s shown to various parties, and noted that the interest is constant and only increasing, as desire to be part of the cannabis wave, if you will, intensifies.

“There’s a lot of interest across the area, but the hot spots are downtown, and especially locations near the casino,” said Lopez, who recently brokered the sale of 1665 Main St., once the headquarters of Hampden Bank, to a party (RLTY Development Springfield LLC) interested in converting it into a dispensary. “There’s a lot of competition for good sites.”

1665 Main St., recently sold to a party interested in converting it into a cannabis dispensary. Evan Plotkin, left, and Freddy Lopez Jr. of NAI Plotkin, which brokered the sale.

The Main Street property, located across from the Hippodrome and a block from Union Station, was most recently assessed at $127,600, but sold for $285,000, a clear sign of the times and an indicator of how hot the race to secure locations for cannabis facilities can, and probably will, become.

“People are jockeying for position right now,” said Lopez, adding that some parties are securing options, some are leasing, and others, like RLTY, are going ahead and buying properties in anticipation of winning a coveted license.

But the cannabis industry is only part of the story when it comes to growing interest in Springfield and especially its downtown, said Mitch Bolotin, a principal with Colebook Realty, based in the heart of downtown.

MGM Springfield has certainly had an impact as well, spurring interest in various forms of development, from retail to housing. But there have been many other positive developments as well, from the relocation of the Community Foundation of Western Mass. to a location on Bridge Street, to the renovation of Stearns Square, to an improved outlook on the part of many when it comes to public safety.

“There are a number of factors driving this,” said Bolotin late on a Friday afternoon after a day of showing various properties, referring to a surge in interest and activity in Springfield and its downtown. “I’ve been doing this for more than 30 years now, and this is the strongest I’ve ever seen it.”

Mitch Bolotin says MGM Springfield is just one of many factors stimulating the most activity seen in the downtown Springfield market in recent memory.

Mitch Bolotin says MGM Springfield is just one of many factors stimulating the most activity seen in the downtown Springfield market in recent memory.

Demetrius Panteleakis expressed similar sentiments. The president of Macmillan Group LLC, now based in Tower Square, said the last quarter of this year has been extremely busy, and he expects that pattern to continue.

“I haven’t seen an October-November-December period as busy as this one — this is usually a slower time,” he noted. “There is a lot of movement; things are very robust right now.”

For this issue and its focus on commercial real estate, BusinessWest looks at why things are heating up in the downtown market and what this warming trend means for 2019 and beyond.

Where There’s Smoke…

Lopez said he has a number of anecdotes that capture the soaring level of interest in Springfield and its impact on the real-estate market.

One of his favorites concerns a party calling to inquire about securing a luxury apartment in downtown Springfield. Lopez explained that the city doesn’t really have any of those, much to the disappointment of the caller.

“This person was looking to do some investing in Springfield, and I think he wanted to use this apartment as a base — he could meet people there,” Lopez explained, adding that this phone call, all by itself, speaks volumes about how the commercial real-estate market is heating up in the city, and also how widespread the interest is.

Indeed, while there are many local parties interested in investment and/or development opportunities, the callers and visitors are also coming from well outside the 413.

“We’re getting calls from developers and investors in Boston, Rhode Island, New York City, and beyond,” he said, noting that many of these calls involve potential housing developments. “People who have never set foot in Springfield now have an interest in the city, and that’s very encouraging.”

That interest comes in many flavors, said those we spoke with, adding that the cannabis industry, and a strong desire to join it, are sparking many of the inquiries.

But these robust times are manifesting themselves in many ways.

Bolotin noted that he recently secured a lease for a new food-service business on Bridge Street. He couldn’t give specifics, but said the deal involved one of the vacant storefronts on that street, damaged first by the natural-gas blast and later by explosions triggered by a water-main break.

It’s an example of the strong interest in the market that he noted earlier, arguably the most activity he’s seen in recent memory.

“We’re seeing a lot of positive signs in the marketplace in terms of activity and interest, leases, and sales,” he said, adding that this vibrancy is reflected in everything from higher occupancy rates in the buildings managed by Colebrook — and there are many in the downtown, including the TD Bank Center and the Fuller Block — to how many showings of properties he’s conducted in recent months.

Overall, Bolotin, like others we spoke with about this, said there is considerably more positive energy concerning the downtown than there has been in some time. MGM deserves some credit for this, he noted, but there are many other factors as well, from the developments on and around Bridge Street to the renovation of the Fuller Block, to less apprehension about public safety. “The attitude is much more positive than it’s ever been.”

He noted that Patricia Canavan, president of United Personnel, who moved her business onto Bridge Street, Katie Alan Zobel, who relocated the Community Foundation to that same area, Tom Dennis, owner of the Dennis Group, who purchased and renovated the Fuller Block, among other buildings downtown, and Martin Miller, general manager of WFCR, who moved his operation from Amherst into the Fuller Block, are all examples of people investing in the downtown, and through, their actions, inspiring others to do so.

Panteleakis has also seen considerable optimism and less apprehension about public safety. “You don’t hear as many concerns about safety,” he said. “Before, safety was a real issue — it kept some people from coming downtown. But you don’t hear that much anymore.”

Meanwhile, housing has become a huge area of interest, in part because of MGM and the needs of its huge workforce, but also because of rising activity levels in general and growing anticipation that the city will soon become, if it isn’t already, a landing spot for younger people and empty-nesters alike.

Evan Plotkin, a principal with NAI Plotkin and long-time champion of downtown Springfield, noted the purchase of the former Willys-Overland building in the so-called ‘blast zone’ by Boston-based Davenport Advisors LLC, and that company’s acquisition of the old Registry of Motor Vehicles site, possibly for the same use, as harbingers of things to come.

“I’m seeing a lot of developers coming in looking to develop residential,” he said. “I see tremendous potential for new developments in parts of our city that have been stagnant for a long time, including areas on the fringes of downtown and in the downtown itself.”

Joint Ventures

While interest in potential housing development grows, the cannabis industry is the source of much of the activity downtown.

The brokers we spoke with said they’ve been showing multiple sites to groups interested in all facets of this business, from cultivation to retail. And while sites across the city are being explored — as many as 15 sites might become licensed in Springfield — the downtown is becoming the focal point.

“Things have been crazy for the past two years when it comes to this business,” he said, adding that he’s brokered the sale of sites for marijuana-related businesses in Holyoke and Easthampton. “Now, the focus is shifting to Springfield and the downtown area; people are trying to line up sites.”

Lopez concurred, noting that there is a broad mix of local, national, and even international companies looking to start a cannabis dispensary or cultivation site in this region, with many focused on Springfield and an initiative known as the Opportunity Zone Program.

Created as part of the U.S. Tax Cut and Jobs Act of 2017, the program provides incentives for investment in low-income communities, like Springfield. Individuals and groups looking to develop in these designated geographic areas can gain favorable tax treatment on their capital gains, said Lopez, adding that he has worked with several owners and investors in the city’s Opportunity Zone.

The purchase of 1665 Main St. falls into this category, he said, noting that the acquisition is a good example of investors jockeying for position through options, leases, or outright purchases.

And the race for cannabis locations should provide a substantial boost for owners of properties downtown, said Plotkin, noting that prices are moving higher as interest grows, in a movement that echoes what happened when MGM Springfield and other casino-industry players jockeyed to enter this market.

“When you were dealing with a casino developer, like MGM or the other parties interested in Springfield, there was what we all referred to as the ‘casino rate,’” he explained. “They’ll pay more for real estate than the average buyer will.

“In the case of a marijuana dispensary, because the business is so lucrative, they will pay a lot more rent per square foot,” he went on, noting that a ‘marijuana rate’ is taking shape. “Rents that may have been $15 a square foot a year ago … for a marijuana shop, we’re taking about $20 to $25 per square foot, and in some cases more, depending on where it is.”

As for what the cannabis industry might mean for Springfield, Plotkin, who has traveled extensively, expressed some hope that the city might someday become somewhat like Amsterdam, a city famous for its culture, nightlife, and countless shops selling marijuana, other drugs, and related paraphernalia.

“I think Amsterdam is a great example of just how the very liberal nature of that city has led to incredible street life in that town that’s very safe,” he said. “Amsterdam is a great city, one of the most vibrant cities in the world, and maybe we can learn from its example.”

Bottom Line

Whether Springfield can become anything approaching Amsterdam — as a tourist destination or cannabis hotspot — remains to be seen.

For the time being, it is a hotspot when it comes to its commercial real-estate market.

There is interest and activity unlike anything that’s been seen in decades, and the consensus is that this pattern will likely continue and perhaps even intensify.

Springfield and its downtown have become the right place at the right time.

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

Economic Outlook

Forward Progress

Rick Sullivan says the region has considerable momentum carrying over in 2019, and it comes from most all sectors of the economy.

Rick Sullivan says the region has considerable momentum carrying over in 2019, and it comes from most all sectors of the economy.

Momentum.

Webster defines that word in several ways, including this one: ‘strength or force gained by motion or through development of events.’

Over the past few years, and especially in 2018, there was a good deal of motion and quite a few singular and ongoing events that have made this region stronger and created quite a bit of momentum, said Rick Sullivan, president and CEO of the Economic Development Council of Western Mass. (EDC).

And this movement has been across a number of sectors and most all area communities, not just Springfield, although that’s where it is easily most visible and palpable.

“We’re seeing a great deal of momentum across the region,” he said. “And it’s across the board — manufacturing, healthcare, higher ed, tourism.”

Elaborating, he cited just a few examples of this momentum, starting with the most obvious:

• MGM Springfield opened its doors on Aug. 24, but it began to impact the regional economy long before that, through the filling of more than 2,000 jobs, proving a boost for area hotels (see related story, page 27), inspiring movement toward additional market-rate housing projects in and around the downtown, and even awarding life-changing vendor contracts with several area businesses, from a bus company in Chicopee to a dry cleaner in the Forest Park section of Springfield.

• Eds and meds. The region’s two main economic drivers, education and healthcare, are thriving and becoming ever-larger contributors to economic development in the region, he said, noting, on the education side, that the region’s community colleges continue to find ways to step up and help meet workforce needs and provide specific skills needed in the workplace.

• The cannabis industry. This intriguing new era in Massachusetts history is impacting everything from the commercial real-estate market to traffic in downtown Northampton, where a dispensary became just one of two sites in Massachusetts selling marijuana for recreational use.

• A host of other forces are at play in downtown Springfield, ranging from new tenants on Bridge Street to the revitalization of Stearns Square; from a new Starbucks (actually, two of them; there’s also one at MGM) to soaring interest in new housing projects; from new train service coming into Union Station to the opening (soon) of the Innovation Center.

“When I’m out downtown, I generally have to wait in line to get lunch — and I’m happy to do it. That’s a good thing; it means the economy is doing well.”

• Progress continues with developing new sources of jobs in fields such as cybersecurity (Bay Path University and UMass Amherst are becoming regional and even national leaders in that field) and water technology — a $3.9 million demonstration center is set to open at UMass Amherst within the next two years.

• The construction industry, usually a bellwether for the economy, remains sound, with many companies reporting they have ample jobs on the books for the coming. “The phones have been ringing — and that’s always a good sign,” said Tim Pelletier, president of Ludlow-based Houle Construction.

Sullivan has another, far more personal measure of progress and momentum. “When I’m out downtown, I generally have to wait in line to get lunch — and I’m happy to do it. That’s a good thing; it means the economy is doing well,” he told BusinessWest, noting that there is considerably more foot traffic in the central business district, and many businesses are benefiting from this.

Yes, there are some challenges to contend with, and even a few possible storm clouds on the horizon; workforce issues are impacting most all sectors, and they could stifle the growth of some companies (see related story, page 22), and most economic analysts are predicting a slowdown (but not a recession) in 2019.

But for the most part, there is momentum and continued cause for optimism, even as question marks grow in number.

‘Stable’ is the word Tom Senecal uses when he talks about the local economy, and in most ways, ‘stable’ is good.

‘Stable’ is the word Tom Senecal uses when he talks about the local economy, and in most ways, ‘stable’ is good.

“Several sectors are doing very well — education, construction, multi-family housing, green energy, and others,” said Tom Senecal, president and CEO of Holyoke-based PeoplesBank, who spoke from the perspective of his own bank, which saw roughly 8% growth this calendar year, and what he’s seen and heard anecdotally.

Senecal said he’s seen a noticeable slowing of residential real-estate business over the past month to six weeks, after a strong start to the year — a development probably linked to rising interest rates — but overall, as he said, the local economy is chugging along nicely.

Keith Nesbitt, vice president and Commercial Banking Team leader at Community Bank’s Springfield location, agreed.

“I would describe what’s happening in Western Mass. as transition against a backdrop of real stability,” he said, using ‘transition’ to mean many things, from the beginning of the casino era to the passing of many businesses from one generation to the next. “There’s a lot of certainty around those well-established, mature businesses that we have in this region. And those businesses that haven’t been around as long but are growing … they’re pretty solid, and they’re pretty confident.”

Banking on It

Both Senecal and Nesbitt put that word ‘stable’ to use early and quite often as they talked about the local economy and what they’re witnessing.

And in most all respects, ‘stable’ — and ‘steady’ and ‘predictable,’ words that were also used — is good, Senecal noted, adding, as many others have over the years while analyzing the local market, that while this region hasn’t soared like some others, including Boston, where the commercial and residential markets are white hot, that means it isn’t susceptible to the dramatic falls that those cities and regions also see.

“Fortunately, and sometimes unfortunately, we don’t see the highs and lows economically; we’re sheltered a little bit,” he explained. “We have a very stable economy when it comes to healthcare, education, and our nonprofit sector — those are three stable industries that keep Western Mass. insulated from the highs and lows.

“I would equate ‘stable’ to ‘predictable,’” he went on. “And for a small business, predictability is a huge part of job growth and just economic growth in general for small business.”

His own business moved forward with several initiatives in 2018, including the acquisition of First National Bank of Suffield and the start of work to convert the former Yankee Pedlar restaurant into a new and intriguing branch. And he said many businesses had the requisite confidence to move ahead with their own growth initiatives, be it through workforce expansion, new facilities, or new business lines.

And he expects this stability to continue into 2019, although possible, if not probable, additional interest-rate hikes (the Fed was set to vote on one as this issue went to press) could bring uncertainty, and therefore greater cautiousness, to the fore.

“Anything that stays stable and is predictable is good for economic development, and anything that is unpredictable is a slowdown in economic development,” he said, adding that there is uncertainty regarding everything from interest rates to the trade war.

“I would equate ‘stable’ to ‘predictable.’ And for a small business, predictability is a huge part of job growth and just economic growth in general for small business.”

Like Sullivan, though, Senecal said MGM has provided a boost to the local economy in several ways — through the jobs it has created and its contribution to greater vibrancy downtown. And it is just one of the many factors contributing to the improved picture locally.

Others include the steady performance of education and healthcare and movement toward creating new sources of jobs.

Sullivan cited the work being done at Bay Path and UMass Amherst in cybersecurity — Bay Path recently entered into a partnership with Google, for example — and creation of the water-technology demonstration center as developments to watch.

“Those are jobs of the future, and there’s real excitement about what can develop,” he noted. “There are now some partnerships with large companies, like Google, and tremendous promise.”

Elaborating, he said that, across the region, colleges and universities are playing key roles in providing individuals with the hard and soft skills to thrive in today’s technology-driven economy, and thus, they’re playing a major role in economic development.

Examples abound, from Holyoke Community College’s new culinary-arts facility, which is helping to meet the needs of individual employers like MGM and a growing field in general, to Greenfield Community College and its efforts to train workers for the manufacturing sector, to Holyoke Community College and Springfield Technical Community College working together with MGM to create the Casino Career Training Institute.

“What it comes down to is that economic development for this region, and across the country, for that matter, is all about workforce — developing, finding, and retaining talent,” he said. “And the good news for us is that we have a very robust higher-ed presence — four-year public and private, and the community colleges as well — and the future is bright.”

Returning to the subject of downtown Springfield, he said that, in addition to that waiting in line for lunch, he’s seen other signs of vibrancy and, most importantly, interest on the part of developers in investing in that area.

“We’ve had a number of investors express interest in possible hotels and potential housing, both market-rate and workforce-housing projects,” he noted. “And those are discussions that may not have beem happening in … pick a time period — five years ago, 10 years ago, 20 years ago. It’s been a while since we’ve seen this.”

Keith Nesbitt describes what’s happening in this region economically as “transition against the backdrop of stability.”

Keith Nesbitt describes what’s happening in this region economically as “transition against the backdrop of stability.”

Nesbitt concurred, and noted that, while the multi-family housing segment of the commercial real-estate market is heating up — it has been for some time — there is movement across the spectrum, much of it fueled not only by MGM, but by a promising outlook for the future.

“Long-time property owners are realizing that now is the time to realize value, so they’re putting those properties on the market,” he said of multi-family units but also other holdings. “And those that are speculating on the future are generally thinking that now is the time to get into the market based on some of those other transitions that are going on. So the commercial real-estate market has been very consistent.”

Steady As She Goes

“Consistent.’ ‘Stable.’ ‘Predictable.’ ‘Steady.’

Those are the words you hear most often in discussion of the local economy today and what is likely to happen in 2019.

There is a good amount of uncertainty in the air regarding everything from trade balances (or imbalances, as the case may be) to interest rates to the political scene in Washington.

But locally, stability and momentum seem to be the prevailing forces.

And they should enable the region to build on that momentum in the year ahead.

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

Features

Expanding His Horizons

Peter Rosskothen

Peter Rosskothen has plans to dramatically expand his Delaney’s Market concept, and he will start in downtown Springfield.

When asked about the long-awaited opening of MGM Springfield last August, Peter Rosskothen, whose various businesses compete against the resort casino on a number of levels, said, among other things, that he was “excited about the excitement” permeating the city’s downtown.

And he hinted broadly that he might soon be part of it.

In a few more months, he will be, opening the second location of his Delaney’s Market concept in a soon-to-be-vacated coffee shop at 1365 Main St., just a few hundred feet from the casino. He plans to open more of these facilities, which offer a variety of prepared meals to go, in Wilbraham and Westfield sometime in 2019, but for now, his time and energies are focused on getting the doors open in Springfield.

Indeed, the serial entrepreneur, owner of the Log Cabin Banquet & Meeting House, the Delaney House restaurant, the adjacent D. Hotel & Suites, and more, believes his concept, launched in Longmeadow 18 months ago, is the right product at the right time, and that downtown Springfield is the next right place.

“I wanted to be part of what was happening in downtown Springfield,” he told BusinessWest. “I believe this concept will work at that location. I think there is a need for this, and it will be a nice addition to the landscape there.”

Rosskothen said he’s long been thinking about expansion into Springfield — and other locations — and narrowed his search to 1365 Main St. late last summer, just as the casino was opening its doors.

That location is within a few hundred feet of several office towers, he noted, adding that the thousands of people working in those buildings fall within the broad constituency he’s targeting with this concept.

“I wanted to be part of what was happening in downtown Springfield.”

Specifically, he’s focused on busy people — and that’s just about everyone these days — both young and old who want to eat healthy, restaurant-quality food (but not at restaurant prices), but are challenged to find the time and inclination to prepare it themselves.

But he expects that those working in Springfield will become just part of his customer base. Indeed, like other close observers, he senses that the already-sizable population of people living in the downtown area will be growing in the years to come as the city becomes a more popular settling place.

“We’re going to be where people work, but also where some people live and where more people will be living in the years to come,” he noted. “There’s a lot happening in Springfield; the pieces are coming together. There is more to do, and soon there will be more places to live. And as more people come to live here, there will be more support businesses and more things to do. We’re starting to see it.”

As for the Delaney’s Market concept, Rosskothen said he did a good amount of due diligence before opening the location in Longmeadow. That research, and his own instincts, told him it was a business model with merit, one that would meet a sizable need that was not being met.

Roughly 18 months after opening, the facility is selling about 150-200 meals a day on average, verifying that need for such a service, he went on.

“The Longmeadow store is doing quite well — I wouldn’t be doing this if it wasn’t,” he told BusinessWest. “But we had to teach a lot of people the concept — you have to explain to people that we have freshly prepared meals for takeout, and we have about 80 different choices.”

The success of the Longmeadow location may mitigate the need for a similar learning process at the downtown site, he went on, adding that he will be aggressive in efforts to get the word out about Delaney’s Market and all that goes into the concept.

That includes patrons being able to pick up a bottle of wine or some microbrews as they make their dinner selection, doing some one-stop shopping.

And he believes this same model will succeed in downtown Springfield as well, and he’s adding another wrinkle — delivery, which he believes will be a popular option for those working in nearby office towers or living downtown.

Indeed, delivery is a becoming a trend among restaurants, and there are new ventures such as Uber delivers that bring meals right to one’s home or office, said Rosskothen, adding that those initiatives, and his, are simply response to what consumers are demanding.

As for expansion beyond Longmeadow, Rosskothen said he expects to move forward with locations in Westfield and Wilbraham and have four sites operating by the end of 2019.

For now, though, he is focused on Springfield — and not just being excited about the excitement, but being a big part of it.

— George O’Brien

Economic Outlook

Running out of Gas?

Bob Nakosteen projects a slowdown for the economy, but not a recession.

Bob Nakosteen projects a slowdown for the economy, but not a recession.

What’s that old saying about death and taxes? It notes that they are the only real certainties in this world.

Actually, there’s another one: when it comes to the economy and making plans for the future, business owners and consumers certainly don’t like uncertainty.

Unfortunately, there is no shortage of that commodity at the moment, and the volume may only be growing. Indeed, there is political uncertainty — lots and lots of that — and uncertainty about the housing market. And the trade war with China. And with the workforce — the nation as a whole is at or near full employment, and business owners and managers across all sectors are asking out loud where the workers are going to come from (see related story, page 22). There’s uncertainty about the stock market, except that there’s considerable amounts of turbulence (we’re certain about that). And about interest rates and what will happen with them. And about whether the tax cuts introduced a year ago will continue to be a source of economic fuel (although the consensus seems to be that they won’t be).

Add it all up, and, as we said, there is a lot of uncertainty out there.

Certainly enough to likely cause a slowdown in the economy, but not a recession in the technical sense of that word, said Bob Nakosteen, a professor of Economics at the Isenberg School of Management at UMass Amherst and a frequent voice in BusinessWest’s annual Economic Outlook.

“When there’s uncertainty, businesses tend to pull in their horns, and consumers, by and large, do the same; they wait until there’s more certainty about what they can expect,” said Nakosteen, adding that, instead of a growth rate between 3.5% and 4%, which is what the country and this region saw in 2018, both are probably looking at 2% to 2.5% for next year.

Again, that’s not a recession, but it is a slowdown.

Like Nakosteen, Karl Petrick, an associate professor of Economics in the College of Arts and Sciences at Western New England University, is predicting that this is what the nation, this state, and this region will see.

Note the future tense.

“When there’s uncertainty, businesses tend to pull in their horns, and consumers, by and large, do the same; they wait until there’s more certainty about what they can expect.”

“I really don’t think the slowdown has started yet. But I think it’s coming,” he said, adding quickly that there are signs things are cooling off somewhat.

He pointed to robust sales in the days and weeks following Thanksgiving as solid evidence that many Americans still have the confidence to spend. But a few months of severe turbulence on Wall Street, large amounts of political uncertainty, and a host of other factors will eventually erode some of that confidence, he added.

Karl Petrick says various forces, from turbulence on Wall Street to political uncertainty, will soon start to generate more cautiousness on the part of consumers and business owners.

Karl Petrick says various forces, from turbulence on Wall Street to political uncertainty, will soon start to generate more cautiousness on the part of consumers and business owners.

“We’re starting to see people become more cautious,” he noted. “They start to see what’s going on, they start to look at their 401(k) statements — even if they’re fairly young, they start to look at such things — and we’re going to start to see people be more cautious. And if and when that happens, companies start to become more cautious, too, because they start to see their markets dry up a bit.

“The momentum will carry into 2019, but unless we see some more certainty, that momentum will peter out into 2020,” he told BusinessWest. “The earliest a recession could happen is 2020, but there’s a lot of time between now and then to avoid that.”

For this issue and its Economic Outlook focus, BusinessWest talked with Nakosteen and Petrick about the proverbial big picture.

On-the-money Analysis

As he talked about the state of the economy and what is likely to happen in 2019, Nakosteen acknowledged that some economists are, in fact, using the dreaded ‘R’ word as they look into their crystal balls.

He’s not ready to join them — yet. But he said there are more than enough signs that a slowdown is coming — if it hasn’t arrived already.

Starting with the housing market.

“The housing market is clearly slowing down, and it is so important to so many segments of the economy and so many parts of the country,” he told BusinessWest. “It’s not well-recognized, but we’ve had a period since 2012 of one of the most sustained increases in housing prices in our history; in fact, it comes close to matching what happened during the price bubble [of 2007-08]. The difference is that there isn’t this froth around it, and there isn’t this huge toxic-credit buildup.

“I don’t see this as a danger to the economy in terms of it exploding and dragging us into a recession,” he went on. “But I do see a slowdown affecting the overall economy and the economy of this state.”

Beyond the housing market, there are other signs, or indicators, of whitewater, including the trade war, if it can be called that, with China, Canada, and other countries.

Nakosteen said this region doesn’t produce many, if any, of the products directly affected by rising tariffs, but this area is affected indirectly because its precision manufacturers provide links in the supply chains that are impacted by the tariffs.

Petrick agreed. “We need to find some stability when it comes to our trade relationships,” he said. “Trade wars are not good for anybody.”

There’s also diminishing impact from the tax cuts implemented a year ago — “those cuts gave the economy a sugar high, but almost everyone thinks that effect will dissipate in 2019,” said Nakosteen — as well as all that turmoil on Wall Street.

Indeed, as of this writing, the S&P was in negative country after being up more than 8% for the year a few months ago — and there wasn’t much time left in 2018 to get onto the plus side.

Then there’s the workforce issue. While things are bad in this region in terms of employers finding good help (see related story, page 22), they’re much worse in other markets, including Boston, said Nakosteen.

“One of the things going on in this state is that we’re running out of workers, especially in the eastern part of the state,” he noted. “For the past 18 months, we’ve hired a lot of people, and no one’s quite sure where they’ve come from. And at some point, the labor-force constraint is going to be binding to our economy, and that’s going to slow things down; it’s going to be like squeezing a rock.”

But the biggest issue heading into 2019 is the one that’s fueling some of the problems listed above — growing uncertainty about the economy, the markets, jobs (GM announced plant closings and significant layoffs, for example), trade, and more.

This uncertainty generally leads to greater cautiousness, which manifests itself in several ways, said those we spoke with, starting with the obvious, such as slowdowns in home sales and other significant purchases.

Some signs are perhaps less obvious, such as the roller-coaster ride on Wall Street, said Petrick, adding that, when there is uncertainty, or no clear trends, the market becomes far more “news-driven,” as he called it, which manifests itself in wild swings, sometimes over the course of just a few hours, as news breaks.

“These big swings happen with the smallest provocation because people want to react to something,” he explained. “And whatever comes up on the news wire is what they’re reacting to.”

Reading the Tea Leaves

Looking at the proverbial big picture, Petrick said political uncertainty and economic uncertainty pretty much go hand-in-hand.

“That’s how we’re wired,” he said, adding that about the only thing that appears certain for 2019 is ongoing uncertainty.

Nakosteen agreed.

“Business decisions, as well as household decisions, regarding big-expense items such as cars, appliances, and houses, depend in large part — not totally, but in large part — on expectations of the future: ‘am I going to lose my job?’ ‘Am I going to get a raise?’ ‘Is my product going to keep selling?’ ‘Are my suppliers going to be disrupted?’”

Like he said, in many cases, they will hold off on such purchases until there is more uncertainty.

And as things are looking now, it might be a pretty long wait.

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

Economic Outlook

The Employment Picture

As the job market tightens, Meredith Wise says, it becomes an employees’ market, with business owners increasingly having to pay for talent.

As the job market tightens, Meredith Wise says, it becomes an employees’ market, with business owners increasingly having to pay for talent.

Meredith Wise says it’s probably not a recent addition to the business lexicon. But it was certainly new to her when she heard it the first time.

‘Ghosting’ is the phrase in question, and it refers to a situation where an individual applies for a job, is given an offer, accepts the offer, passes a drug test, is given a starting date, accepts the starting date, and when it comes … he or she just doesn’t show up for work.

“That individual doesn’t feel the need or have the courtesy to call the company and say, ‘I’m not going to take the job; I have another opportunity that’s going to be better for me’; they just don’t show up,” said Wise, executive director of the Employers Assoc. of the NorthEast (EANE), adding that, when she first heard the term from one of her members, she thought it was an aberration and certainly not a common occurrence.

Suffice it to say that she has been corrected on that viewpoint at several of EANE’s monthly member roundtables over the past year or so.

“When I first brought it up I said, ‘oh, this can’t really be happening — this isn’t something people would do,’” she recalled, flashing back several months. “I expected pushback and people saying, ‘no, that doesn’t happen to me.’ Instead, there was agreement around the table that it is happening — a lot.”

Wise said this pattern of ghosting, which is happening in many sectors and at all rungs of the ladder — from entry-level service jobs to senior engineering positions — might be a form of role reversal when it comes to the employment process, and a very clear sign that this is an employees’ market.

“When employers get applicants, there are many times when they don’t communicate back to people; they don’t say, ‘thanks for applying, but we don’t have anything at this time,’” she explained. “As a candidate, you feel your résumé or your application has gone into a black hole. And it almost feels to me like the candidates are turning the tables on employers and saying, ‘I’m not going to get back in touch with you, and I’m just going to do what’s best for me.’”

Bryan Picard, president of Springfield-based Summit Careers Inc., agrees with Wise’s take and can certainly verify the overall tightness of the market, at least through most of this year — and the ghosting phenomenon.

To capture it, he cited the example of a company in Northampton trying to fill a basic warehouse position, with the emphasis on trying.

“We had to fill that same position six or seven times,” he explained, “because the first five people just didn’t show up for the job, and this is a position paying $5 an hour more than the average. There were so many opportunities for strong candidates to go somewhere else, they just didn’t show up.”

Finally, Summit decided to send several people to this client at the same time with instructions to pick the one it liked most — on the theory that at least one of them would show. And a few did, actually.

Meanwhile, the firm has strongly advised its clients to condense the overall hiring process — especially the period between when one is offered a job and when one starts — to hopefully keep would-be employees from becoming ghosts.

“The reality is that minimum wage went to $12 an hour four months ago. There are still companies paying $11 an hour, but the vast majority of them are paying more than what the minimum wage is because they know it’s required.”

All this is part of life in the current employment market, one that is expected to continue into 2019, in most ways and in most sectors — although Picard is seeing some signs of a slowdown in manufacturing (more on that later), and economists, in general, are projecting that the pace of expansion will slow in the year ahead.

“Overall unemployment numbers should stay steady into the first quarter of 2019, said Larry Martin, director of Business Services and Market Research for the MassHire Hampden County Workforce Board, noting that unemployment was quite low — 4% to 5% — across the region this year. “We see things being steady in the first quarter without any major shifts or changes — we should remain fairly flat.”

Wise agreed, and said flat means more challenging times for employers. Indeed, for now and the foreseeable future, the laws of supply and demand clearly favor employees, she said, with business owners adjusting, out of necessity, with slightly higher wages and better benefits.

“Employers are now sometimes having to buy talent,” she explained. “The applicant pool just isn’t what it was, and to lure people away from their current employer, they may need to be paying a few dollars per hour more to get people to come.”

For this issue and its Economic Outlook 2019, BusinessWest takes an in-depth look at the employment market and what employers can expect in 2019. For the most part, it is more of the same.

Work in Progress

Picard told BusinessWest that, although the minimum-wage hike to $12 an hour — the first in a series of incremental increases contained in the so-called ‘grand bargain’ legislation — doesn’t become law until Jan. 1, practically speaking, it went into effect long ago.

“The reality is that minimum wage went to $12 an hour four months ago,” he said. “There are still companies paying $11 an hour, but the vast majority of them are paying more than what the minimum wage is because they know it’s required.”

Bryan Picard says he’s seeing a slight slowdown in manufacturing, but overall, the job market remains tight.

Bryan Picard says he’s seeing a slight slowdown in manufacturing, but overall, the job market remains tight.

And this upward movement on wages, at least on the lower end, is yet another sign of how tight the labor situation is and how this is an employees’ market. And while there is speculation on just how long it will stay that way, employers for the moment face a number of challenges, and are responding accordingly, said Wise, who said it starts with the applicant pool, or what passes for one, in many cases.

“Employers are finding real problems with the applicants — they’re just not getting the volume of applicants they used to get, and the people they are getting just don’t have, in many cases, the qualifications and the skills that they’re looking for.”

But the problems certainly don’t end there, Wise said, adding that a huge issue for employers is finding applicants that can pass a drug test. The percentage of applicants that can’t would surprise some, but certainly not anyone working in human resources today, she told BusinessWest.

And if they do have the skills and they can pass a drug test … that generally means that they have many opportunities to choose from and are a solid candidate to become a ghost.

“When we would get candidates of a higher caliber that we would send on a temp-to-perm type of position, the challenge we saw was that they didn’t just have one job offer, they had five job offers,” said Picard. “And the companies that were really struggling starting bringing up their pay scales.”

Indeed, in response to all this, wages are increasing, but the pace of increase is still sluggish, as the chart on page 24 shows.

“I think wages are slightly higher, but wage growth is, overall, very slow,” said Wise, adding that there are several reasons for this, including the fact that retiring Baby Boomers are being replaced by less-experienced, lower-paid employees. Also, pay increases at the top end of wage earners are smaller increases for lower-wage earners, resulting in a lower overall average increase.

Beyond ‘paying for talent,’ to whatever extent they are doing so, employers are also responding to the tight market by altering their hiring policies and practices in some ways to keep good talent from going elsewhere and thus becoming ghosts.

“These trends are forcing employers to go back to what might be considered best practices,” Wise explained, noting, as one example, that after having an applicant accept an offer, the company in question is working harder to stay in touch with that applicant until they arrive for work, asking if they have any questions or just staying in communication with them.

Meanwhile, others are sending soon-to-be employees what she called “swag bags” or “swag items” such as a jacket with the company’s logo on it or a mousepad or other items as a gesture designed to show that the individual is valued.

Meanwhile, and as noted earlier, companies are being advised to condense the hiring process, especially the period between when one is hired and when that individual is slated to start work.

“If there is someone good that you want to put in a position, you put them in right away,” said Picard, adding that he went to far as to encourage clients to skip or accelerate the interview the process, hire promising candidates, and essentially interview them after they were hired.

Hire Power

If all this seems a world apart from what was happening only a few years ago, it is, said Picard, adding that conversations he had with colleagues in this field from across the country revealed that this past year, and especially this past summer, was among the most difficult times anyone could remember when it came to securing qualified help for clients.

“They said it was the worst summer they’d seen in … forever, or at least 50 or 60 years, and that’s understandable with unemployment being at an all-time low,” he said, adding that, while things were not that bad in this market, employers in many markets struggled to find and keep talent.

That’s certainly been the case with precision manufacturing, one of the specific sectors that Summit specializes in.

“Every single company out there right now is looking for CNC machinists,” he told BusinessWest. “Many have more work than they can get out the doors, or more sales orders than they have people to fill them.”

“Employers are finding real problems with the applicants — they’re just not getting the volume of applicants they used to get, and the people they are getting just don’t have, in many cases, the qualifications and the skills that they’re looking for.”

The $64,000 question heading into the new year concerns how long things will stay this way.

As noted earlier, Picard said he has witnessed a slowdown when it comes to some segments of the manufacturing sector, and somewhat easier going when it comes to finding employees for those clients.

“I think things are changing; a lot of times, manufacturing is a leading indicator for what’s going to happen with the economy,” he explained. “The summer was very tight, but now, probably over the past month and a half, things were not as tight. We’re seeing very qualified, strong candidates that are coming through that four months ago … well, we would be begging for someone with half the talent that we’re seeing right now.”

Elaborating, he said he projects that 2019 will be “an interesting year” for his company and a less-busy one for some of his clients, especially those in manufacturing, and he comes to that conclusion mostly by comparing numbers from the fourth quarter this year compared to last year.

“In the fall of 2017, we were very busy, and I brought on someone to help in November,” he recalled. “I said, ‘this is our slowest time of the year, it’s a great time to come on, we’ll be able to do some coaching, things will be nice and easy.’ About January, she said, ‘when is it going to slow down again?’ because it never did.”

This year, it has, and Picard says it may be a sign of what’s to come in the year ahead.

Martin, meanwhile, is projecting essentially the status quo when it comes to the employment market — in manufacturing and most other sectors.

“For manufacturers, it’s going to be steady going, and they are going to need skilled help because of the individuals who are retiring,” he explained. “That’s not going to slow down whatsoever.”

He noted that the region essentially absorbed the arrival of MGM Springfield and its hiring of more than 2,000 people without major disruption to most sectors of the economy, even the broad culinary field, primarily because of proactive steps in anticipation of that seismic event.

“There was a lot of foresight and forecasting done in advance of MGM,” he explained. “There were a lot of new partnerships established, especially with the community colleges to help meet specific needs, such as those in culinary.

“Several sectors were impacted — culinary, retail, financial services, and others — but enough forecasting was done ahead of time to prepare for MGM’s arrival,” he went on. “And a lot of companies planned ahead and internally provided financial encouragement or other types of encouragement for existing staff.”

The challenge moving forward will be with the inevitable churn that the casino complex will experience, he went on, adding that while MGM, working with those partners he mentioned, had enough employees to get the doors open, it must now deal with ongoing turnover and the task of keeping workers in the pipeline.

Learning on the Job

As he talked about the job market and what may come in 2019, Picard concurred with Wise when she talked about many workers not exactly being courteous when it comes to taking better offers and instead becoming ghosts.

Likewise, he said all this amounts to a kind of payback, if you will, for how employers act when the laws of supply and demand are tilted in their favor.

He warned, however, that too much moving around and a great many lines on a résumé may come back to … well, haunt those ghosts when things change and the market is not so tight.

For now, though, it’s an employees’ market and will be for the foreseeable future, and employers looking to land good talent quickly and easily likely have a ghost of a chance of doing so.

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

Economic Outlook

Right Place, Right Time

John Doleva shows off the Basketball Hall of Fame’s renovated theater, one of many improvements at the hall.

John Doleva shows off the Basketball Hall of Fame’s renovated theater, one of many improvements at the hall.

They call it the ‘need period.’

There are probably other names for it, but that’s how those at the Greater Springfield Convention & Visitors Bureau (GSCVB) refer to the post-holiday winter stretch in this region.

And that phrase pretty much sums it up. Area tourist attractions and hospitality-related businesses are indeed needy at that time — far more than at any other season in this region. Traditionally, it’s a time to hold on and, if you’re a ski-related business, hope for snow or enough cold weather to make some.

But as the calendar prepares to change over to 2019 — and, yes, the needy season for many tourism-related businesses in the 413 — there is hope and optimism, at least much more than is the norm.

This needy season, MGM Springfield will be open, and five months into its work to refine and continuously improve its mix of products and services. And there will also be the American Hockey League (AHL) All-Star Game, coming to Springfield for the first time in a long time on Jan. 28 (actually, there is a whole weekend’s worth of activities). There will be a revamped Basketball Hall of Fame, a few new hotels, and some targeted marketing on the part of the GSCVB to let everyone know about everything going on in this area.

“The last half of 2018 has been great, and we’re very optimistic — our outlook for tourism is really positive for 2019. Certainly, MGM is a factor — it’s a huge factor, it’s a game changer — but it’s just part of the story.”

So maybe the need period won’t be quite as needy as it has been.

And if the outlook for the traditionally slow winter months is brighter, the same — and more — can be said for the year ahead, said Mary Kay Wydra, president of the Greater Springfield Convention & Visitors Bureau, noting that expectations, based in large part on the last few quarters of 2018 and especially the results after MGM opened on Aug. 24, are quite high for the year ahead.

“The last half of 2018 has been great, and we’re very optimistic — our outlook for tourism is really positive for 2019,” she told BusinessWest. “Certainly, MGM is a factor — it’s a huge factor, it’s a game changer — but it’s just part of the story.”

Elaborating, she said MGM is helping to spur new development in this sector — one new hotel, a Holiday Inn Express, opened in downtown Springfield in 2018, and another, a Courtyard by Marriott, is set to open on Riverdale Street in West Springfield — while also filling more existing rooms and driving rates higher.

Indeed, occupancy rates in area hotels rose to 68.5% in October (the latest data available), up nearly 2% from that same month in 2017, and in August, they were up 5% (to 72.6%) over the year prior.

Meanwhile, room revenue was up 4.6% in October, from $113 a night on average in this region to $119 a night, and in August, it went up 7.2%.

And, as noted, MGM is just one of the reasons for optimism and a bright outlook in this sector, Wydra said. Others include the renovated hoop hall, yearly new additions at Six Flags, and the awesome drawing power of the Dr. Seuss museum on the Quadrangle.

An architect’s rendering of the renovated third-floor mezzanine at the Basketball Hall of Fame, which includes the tributes to the inductees.

An architect’s rendering of the renovated third-floor mezzanine at the Basketball Hall of Fame, which includes the tributes to the inductees.

For 2019, the outlook is for the needle to keep moving in the right direction, she said, noting that some new meetings and conventions have been booked (more on that later); Eastec, the massive manufacturing trade show, will be making its biennial pilgrimage to this region (specifically the Big E); the Babe Ruth World Series will again return to Westfield; and the AHL All-Star weekend will get things off to a solid start.

John Doleva, president of the Basketball Hall of Fame and a member of the executive board of the GSCVB, agreed.

“With MGM now in the marketplace and being active, there does appear to be a lift, much more of an excited spirit by those that are in the business,” he noted. “Everybody is saying that, at some level, their business is up, their interest in visitation is up — there is a general feeling of optimism.”

Getting a Bounce

Doleva told BusinessWest that MGM opened its doors toward the tail end of peak season for the hoop hall — the summer vacation months. Therefore, it’s too early to quantify the impact of the casino on attendance there.

But the expectations for the next peak season are quite high, he went on, adding that many MGM customers return several times, and the hope — and expectation — is that, on one or several of those return trips, guests will extend their visit far beyond the casino’s grounds.

“Once people return a few times, they’re going to be looking for other things to do,” he said. “I definitely feel a sense of excitement and anticipation, and I’m definitely looking forward to next summer when it’s the high-travel season, and really get a gauge for what the potential MGM crossover customer is.

“Conversely, there are probably individuals that would probably have the Hall of Fame on their list of things to do,” he went on, “and now that there’s more of a critical mass, with MGM right across the street, I think we rise up on their to-do list.”

But MGM’s arrival is only one reason for soaring expectations at the hall, said Doleva, adding that the facility is in the middle of an ambitious renovation project that is already yielding dividends.

Indeed, phase one of the project included an extensive makeover of the lobby area and the hall’s theater, and those steps have helped inspire a significant increase in bookings for meetings and events.

Mary Kay Wydra says 2019 is shaping up as a very solid year for the region’s tourism industry.

Mary Kay Wydra says 2019 is shaping up as a very solid year for the region’s tourism industry.

“Our renovations have led to a great number of facility rentals for events that are happening in our theater, our new lobby, and Center Court,” he said, adding that the hall was averaging 175 rentals a year, and will log close to 240 for 2018. “Before, the theater wasn’t a hidden gem, it was just hidden; it was like a junior-high-school auditorium — it was dark, it was gray, it had no life. Now, it’s a great place to have a meeting or presentation like a product launch.”

Phase 2 of the project, which includes a renovation of the third-floor mezzanine, where the Hall of Fame plaques are, and considerable work on the roof of the sphere, will commence “any minute now,” said Doleva, adding that the work should improve visitation numbers, but, even more importantly, revenue and profitability.

The improved numbers for the hall — and the optimism there concerning the year ahead — are a microcosm of the broader tourism sector, said Wydra, adding that a number of collaborating factors point toward what could be a special year — and a solid long-term outlook.

It starts with the All-Star Game. The game itself is on a Monday night, but there is a whole weekend’s worth of activities planned, including the ‘classic skills competition’ the night before.

“Even with the average daily rate going up and occupancy growing, we still have that need period — which is true for all of Massachusetts,” she noted. “When you have an event like the All-Star Game in January, that really helps the hotels and restaurants.”

Additional momentum is expected in May with the arrival of EASTEC, considered to be New England’s premier manufacturing exposition. The three-day event drew more than 13,000 attendees last year, many of whom patronized area restaurants and clubs, said Wydra, adding that MGM Springfield only adds to the list of entertainment and hospitality options for attendees.

The Babe Ruth World Series is another solid addition to the year’s lineup, she noted, adding that the teams coming into the area, and their parents, frequent a number of area attractions catering to families.

Analysts say MGM Springfield has a far-reaching impact on the region’s tourism sector, including higher occupancy rates at area hotels and higher room rates.

Analysts say MGM Springfield has a far-reaching impact on the region’s tourism sector, including higher occupancy rates at area hotels and higher room rates.

Meanwhile, the region continues to attract a diverse portfolio of meetings and conventions, said Alicia Szenda, director of sales for the GSCVB, adding that MGM Springfield provides another attractive selling point for the 413, which can already boast a host of amenities, accessibility, and affordable hotel rates.

In June, the National Assoc. of Watch and Clock Collectors will stage its 75th annual national convention at the Big E, she said, an event that is expected to bring 2,000 people to the region. And later in the summer, the Professional Fire Fighters of Massachusetts will bring more than 900 people to downtown Springfield.

Those attending these conventions and the many others slated during the year now have a growing list of things to do in this region, said Wydra, who mentioned MGM, obviously, but also the revamped Hall of Fame; Six Flags, which continues to add new attractions yearly (a Cyborg ride is on tap for 2019); and the Dr. Seuss museum, which is drawing people from across the country and around the world.

“The Seuss factor is huge,” said Wydra. “It’s a big reason why visitation is up in this region. Seuss is a recognizable brand, and the museum delivers on the brand, and they keep reinventing that product.”

Staying Power

This ‘Seuss factor’ is just one of a number of powerful forces coming together to bring the outlook for tourism in this region to perhaps the highest plane it’s seen.

Pieces of the puzzle continue to fall into place, and together, they point to Western Mass. becoming a true destination.

As noted, even the ‘need period’ is looking less needy. The rest of the year? The sky’s the limit.

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