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BOSTON The echoes of the COVID-19 global health crisis were apparent in the latest edition of The Index of the Massachusetts Innovation Economya report that tracks the strength of the Commonwealth’s tech and innovation sectors.

Even with net job losses in nine of 11 key tech sectors in 2020, the Massachusetts tech and innovation economy continued to be a top state in terms of total R&D investment ($36 billion in 2018, second only to California), record venture capital investment ($15.8 billion in 2020), and increased investment in higher education per student (up 29.4% since 2015).

Despite the data capturing the worst of the COVID-19 recession, all three of the sectors below were well above their 2015 employment levels, with the first two having actually added jobs during 2020:

• Biopharmaceuticals and Medical Devices (+37.8% since 2015);

• Scientific, Technical, & Management Services (+25.4% since 2015); and

• Software & Communications Services (+16.8% since 2015).

The 2021 Index found the following areas were bright spots for the innovation economy:

Leading Higher-Ed:

• A marked increase in higher education investment, with appropriations per student up 29.4% since 2015, greater than any of the LTS save for California;

• Highest number of degrees conferred per capita among the LTS (18.1 per 1,000 residents);

• 47.6% of the workforce has at least a bachelor’s degree, higher than any other state and well above the U.S. average of 34.4%.

R&D and VC Investment Rising: 

• Massachusetts is one of the leading producers of patents per capita, with 1,275 utility patents per million residents in 2020, second in the LTS;

• Of the 5 LTS with more than $1 billion in annual investment in 2015, Massachusetts saw the fastest growth in VC funding, up 88.3 percent from 2015 to 2020.

Healthcare Research:  

• $3.3 billion in National Institutes of Health (NIH) funding in Massachusetts in 2020;

• $5,659 of NIH funding per $1 million GDP;

• 11 Massachusetts research institutions received more than $100 million in NIH funding in 2020.

“While the pandemic’s impacts were stark, the investments made by the private and public sectors continue to fuel growth in the areas that are driving our innovation economy,” said Pat Larkin, director of the Innovation Institute at MassTech. “On education, we’ve seen the clear rise in higher-ed investment by the state, which is a key driver for our talent development pipeline. The Index also points to the potential for further strengthening, as the state expands Innovation Pathways programs at the K-12 level, efforts which will further train students for careers in advanced manufacturing and robotics, which desperately need talent.”

All 10 leading tech states saw net job losses in key sectors during 2020, including in Massachusetts. Since 2015, the Commonwealth’s innovation job losses were concentrated in a few key manufacturing sectors, including: Diversified Industrial Manufacturing (- 6.9%); Advanced Materials (-7.4%); and Computer & Communications Hardware (-16.9%).

To download a copy of the Index of the Massachusetts Innovation Economy, or to access interactive copies of the graphs and charts from the report, visit masstech.org/index.

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The Shape of Things to Come

With the arrival of spring, stimulus checks, and vaccinations for growing numbers of residents, continued recovery from the steep economic decline of 2020 is in the forecast. But like the weather, economic rebounds are difficult to predict. With this recovery, there is still widespread speculation as to what shape it will take — U, V, W, K, even the Nike ‘swoosh.’ Myriad factors will ultimately determine that shape, from the ongoing threat of inflation to uncertainty about when and to what extent people will gather again, to questions about just how willing Americans are going to be when it comes to spending some of the money added to their bank accounts over the 12 months that ended in January.

$4 trillion!

That’s the amount Americans added to their bank accounts over the past 12 months or so, a savings rate perhaps never before seen in this country, which has hasn’t been known for that trait.

It came about because of all the things that people couldn’t spend money on, or didn’t see the need to spend on — everything from summer camp to vacation cruises; celebratory meals out at restaurants to new dress clothes; Red Sox tickets to visits to their favorite museum. Granted, there was some spending going on, especially when it came to things like pools, new flooring, and new deck furniture for the home — or a new home itself, be it a vacation home or a bigger primary residence.

“I am pretty optimistic that people are just to their wit’s end with being isolated; they really want to get out, do things, and buy things. They just want to live a normal life again.”

But, for the most part, Americans were saving in 2020.

And now that there is light at the end of the tunnel, and it seems like people will be able to spend some of the money they saved, the speculation involves just how willing they will be to go back in the water, if you will, and do some of the things they had to forgo for a year.

That’s just one of many factors that will ultimately decide the shape of the recovery we’re now in, and how quickly the nation will get back to something approaching normal.

As several of the stories in this issue reveal, the world, or at least this part of it, is returning to a sense of normal. Hotels are booking rooms again, airports are busy (or at least busier), Tanglewood and Jacob’s Pillow will have seasons in 2021 — albeit different kinds of seasons — and, overall, the state has entered into what Gov. Charlie Baker calls stage 4 of his recovery plan. This final stage will allow indoor and outdoor stadiums to run at 12% capacity, the state’s travel order to be downgraded to an advisory that recommends people entering Massachusetts quarantine for 10 days, public gatherings to be limited to 100 people indoors and 150 people outdoors, and exhibition and convention halls to operate if they can follow gathering limits.

It’s a big step forward, but much will depend on how willing people will be to gather in these places, and how confident they will be to travel. Meanwhile, there’s all that money that people saved and the latest round of stimulus checks now finding their way into people’s bank accounts. Will people spend them, and what will they spend them on?

And what if there is a spending frenzy and economists’ fears of inflation, potentially the runaway variety, become realized?

These are just some of the questions hanging over the job market and this overall recovery, which will, at the very least, be unlike anything else the country has experienced. Indeed, it has bounced back from recessions, tech bubbles, a 9/11 downturn, wars, and more. But it hasn’t seen anything quite like this — a pandemic-fueled economic crisis that wiped out millions of jobs, followed by, and accompanied by, federal stimulus on an unprecedented level.

Mark Melnik

Mark Melnik

“Just because we hear, ‘get back in the water, everybody,’ it doesn’t necessarily mean that folks will. I think there’s reason to be bullish about the Massachusetts economy in the second half of 2021 and the early part of 2022 because of the pent-up demand. But so many of these issues are going directly to the comfort level that people are going to have psychologically.”

“I’m a little less cautiously optimistic than some, but I am pretty optimistic that people are just to their wit’s end with being isolated; they really want to get out, do things, and buy things,” said Bob Nakosteen, professor of Economics at the Isenberg School of Management at UMass Amherst. “They just want to live a normal life again.”

Mark Melnik, director of Economic and Public Policy Research at the UMass Donahue Institute, concurred, but offered some caveats.

“There’s a psychological element to the economy,” he told BusinessWest. “Just because we hear, ‘get back in the water, everybody,’ it doesn’t necessarily mean that folks will. I think there’s reason to be bullish about the Massachusetts economy in the second half of 2021 and the early part of 2022 because of the pent-up demand. But so many of these issues are going directly to the comfort level that people are going to have psychologically.”

 

History Lessons

As they have many times over the past year, experts pointed to Worlds War II as the only recent point in history that can in any way compare with the ongoing pandemic, and noted that the comparisons hold when it comes to what happened when it was all over.

“During the war, people couldn’t buy a car, and there was a great deal of rationing,” said Nokosteen, adding that, as a result, people were saving. And while there was a lull right after the war ended, during which some feared the country would actually sink back into the Great Depression that officially ended with the war, people soon started spending — big time.

“Everyone wanted to spend money,” he told BusinessWest. “And they had some money — people started cashing in the war bonds they bought, and soldiers came home to the G.I. Bill. There were a lot of things that spurred the economy on, and it came back quickly after that initial slump.”

Experts are predicting something along those lines for 2021 and 2022, but there are a number of variables that could determine the ultimate shape of this recovery.

“In many ways, this recession has been the most unequal we’ve ever seen. And it has really exacerbated existing social inequalities, both in Massachusetts and nationally. People who were vulnerable to begin with are just made more vulnerable.”

“Looking at what’s taken place after the real substantial decrease in the first half of 2020, which was historic in terms of just how fast the economy contracted, and with the third round of stimulus hitting people’s bank accounts, we seem to have avoided some of the worst-case scenarios, which would have been a U-shaped recession, where we dragged along the bottom for a long time before we took off, or a very sharp, V-shaped recovery, which also would have been bad because of worries about inflation,” said Karl Petrik, a professor of Economics at Western New England University. “We managed to have missed both of those, and I’ve almost come to the opinion that we have a check-mark-like recovery.”

Elaborating, he said the country did see a recovery starting in the second half of 2020, and the second economic-stimulus package in January helped continue that momentum. The third stimulus package, coupled with pent-up demand and the ability to do things one couldn’t do in 2020 (spring break in Miami was one good example), should enable the economy to keep chugging, he went on, with the rosiest of forecasts calling for 6.5% growth, with the least rosy being around 4%.

“Both of which would be very good,” he told BusinessWest, adding that the expectation is that there will be a return to the ‘trend’ growth rate, which, after the Great Recession, was about 2.5%.

“One of the worries when you’re coming out of recession is that you know you’re going to go back to your trend growth rate — that’s why it’s the trend,” he explained. “You just don’t want to go back too soon because it just prolongs the pain in terms of the economy having the ability to recover; that’s what we saw after the Great Recession. We never saw the real takeoff, just a slow, steady, gradual growth rate up to 2019.”

Such fears probably fueled anxiety about going too small with recovery packages, Petrick noted, adding that he believes the $1.9 trillion bill that ultimately passed is certainly big enough.

Karl Petrick

Karl Petrick

“One of the worries when you’re coming out of recession is that you know you’re going to go back to your trend growth rate — that’s why it’s the trend. You just don’t want to go back too soon.”

But questions abound about how this recovery will play out and who will benefit most. With that, Melnik talked about the growing sentiment that the recovery has been, and will continue to be, K-shaped in nature, with lines going both up and down, depending on which income bracket you’re in.

“We’ve definitely seen a bifurcation in terms of educational attainment in industry, wages, and who’s been able to work and who’s been more likely to be unemployed, and long-term unemployed,” he explained. “Those people who tend to have limited educational attainment who were working in face-to-face industries, service-type sectors, including food service, restaurants, and hospitality, and other services like barber shops, dry cleaners, nail salons, and auto-repair places … those kinds of industries have been hurt dramatically, and they really haven’t recovered many of the lost jobs.

“In many ways, this recession has been the most unequal we’ve ever seen,” he went on. “And it has really exacerbated existing social inequalities, both in Massachusetts and nationally. People who were vulnerable to begin with are just made more vulnerable.”

Looking ahead and to what course the recovery will take, Nakosteen and others said so much depends on how comfortable people will be to go back to what life was like pre-pandemic, if you will.

“How are people going to feel going out in public when the public isn’t wearing masks?” he asked, adding quickly that he doesn’t know the answer. But whatever that answer is, it will go a long way toward determining how quickly and how profoundly the country, and this region, are able to rebound.

“It isn’t just vaccinations and dealing with these new variants,” he went on. “A lot of what will determine if there’s pent-up demand and how it’s released is truly behavioral. There’s no economic reason for there not to be a sharp rebound; I think it’s behavioral, it’s epidemiological, it’s medical.”

 

What’s in Store?

As for spending … area retailers are obviously looking for the lid to come off, although in some cases, the lid wasn’t on very hard to begin with.

Dave DiRico, owner of the golf shop in West Springfield that bears his name, said that, after a very quiet early spring last year, there was a surge in spending on golf equipment and apparel as many people picked up the game, or picked it up again, because it was one of the few things people could actually do.

It’s early in the new year, but that trend is continuing, he told BusinessWest, adding that the store has been packed with players loading up for the coming year.

“We’ve been really, really busy, even for this time of year,” he said. “A lot of people have money to spend, and … they’re spending it. We’re seeing a lot of people coming in telling us they’re spending their stimulus money, and that’s a good thing. That’s what it’s for, when you get right down to it — stimulating the economy.”

Peter Wirth, co-owner of Mercedes-Benz of Springfield, expressed similar sentiments, noting that, after sales ground to a halt right after the lockdown of last March, they picked back up as stimulus checks came in, carmakers started offering almost unprecedented incentives, and consumer confidence picked up.

Granted, lack of inventory, fueled by supply-chain issues, slowed the pace of progress somewhat, but many consumers simply ordered vehicles and waited — sometimes for months — for them to arrive at the dealership.

“The main things for us is consumer confidence,” he noted. “If the consumer has confidence in the economy as a whole and in their own situation, where they don’t feel like they’re going to lose their job next week, that’s when they’re going to spend money. And that affects us just like it impacts any other business. And I think more and more consumers feel we’re going to come out of the woods on this year, this summer, whenever it is.”

The picture is improving when it comes to inventory issues, said Wirth, who expects the numbers of new cars on the lot to continue rising through the year. Meanwhile, manufacturers are keeping their foot on the accelerator when it comes to incentives. Overall, he expects 2021 to be another solid year — one comparable to those just before the pandemic in terms of overall sales and service volume.

“We feel pretty about this year,” he said. “One news story can certainly change that, but the outlook for now is good, and that line about a rising tide lifting all boats is true, and we hope that this rising tide will help those businesses in hospitality and other sectors that have suffered so much.”

One sector certainly looking for a different kind of 2021 is the clothing industry, specifically businesses focused on dress clothes. Many workers simply didn’t have to buy any in 2020, as they working at home or still toiling in the office, often with more casual dress codes to match those of people working from their kitchen table.

“As a business owner, 2020 was my most challenging year, bar none; I was faced with more struggles and complications and challenges and problems to solve and situations to fix than I’ve ever faced before,” said William Brideau, owner of Jackson Connor, located in Thornes Market in Northampton, adding that the store has managed to keep going through persistence — and a PPP grant. But the challenges have continued into 2021.

Indeed, the first quarter of this year has in many ways been his most difficult, he said, due to a gap between infusions of stimulus, when it became more difficult to pay the bills. As more support comes in, he’s feeling optimistic about 2021, but he needs people to start investing in new threads — and not just shirts that can be seen during Zoom meetings.

William Brideau believes many people are ready to get dressed up

William Brideau believes many people are ready to get dressed up, which bodes well for his store, Jackson & Connor, which suffered through a rough 2020.

“A lot of people aren’t going for pants or more formal things below the waist,” he noted. “A lot of shirts, sweaters, and sport coats — and things have certainly veered more casual.”

But he has observed a pendulum swing of sorts, with more customers coming in recently looking for suits and ties.

“One of our really good customers came in recently and said, ‘I’ve had it — I’ve been in sweatpants for months, and I’m sick of it. I need a sportcoat, I need a shirt and tie, I need trousers. I want to look like I used to look; I miss that,’” said Brideau, adding that he believes many more people harbor similar sentiments.

 

Bottom Line

Over the past 12 months, people have come to miss a lot of the things they once enjoyed. The extent to which they’ve ‘had it’ with these matters — everything from the clothes on their back to the restaurants they haven’t been frequenting — will ultimately determine not just the composite shape of the recovery, but how, and for whom, things bounce back.

As Melnik noted, just because the ‘go back in the water’ advisories are out doesn’t mean people will heed them. And if they don’t, more of that $4 trillion will stay in bank accounts. And that might ultimately push back the date when we can really say the pandemic is behind us.

 

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

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Welcome Mat

At the practice she owns in Wilbraham, Excel Therapy & Conditioning, Dr. Sara Hulseberg is used to multiple physical therapists and coaches treating a host of patients each day, and for the center’s gym to be a hive of activity for members recovering from injury or improving their performance.

It’s quieter now, with a fraction of the usual patients in treatment rooms and in the gym at a time, and plenty of space between everyone.

That’s life in the capacity-limited world of doing business in the age COVID-19, but Hulseberg has rolled with the punches because … what choice does she have?

“With the way things are going for some of my friends who have closed down, I’m thrilled we’re still open,” she told BusinessWest. “I’ve had to take advantage of PPP loans and disaster-relief loans in order to make sure we can stay open, but we are still able to serve our patients and clients, and they’re excited to be coming in.”

That said, she added, it’s difficult to make a profit in survival mode, when the first priority is keeping the doors open and keeping employees paid.

“Those are small victories, and it’s a testament to the fact that we’re doing something right, because people feel safe coming in for group classes. In so many places, group classes have all but disappeared. I’ll take the small victories, and hopefully, we’ll find a way to combat this season and actually start making money again. The goal is to serve people, but it would be nice to make money while doing it.”

On the other hand, Nick Noblit, general manager of Yankee Mattress in Agawam, hasn’t struggled too badly with the past eight months of forced 25% capacity, because that capacity isn’t too onerous in a store with more floor space per customer than most.

“With the way things are going for some of my friends who have closed down, I’m thrilled we’re still open. I’ve had to take advantage of PPP loans and disaster-relief loans in order to make sure we can stay open, but we are still able to serve our patients and clients, and they’re excited to be coming in.”

He did feel the weight of the restrictions during the state’s tax-free holiday back in August — when the store typically does about two months of business in one weekend.

“At that point, we were still at minimum capacity, and we did have to have a greeter at the door monitoring how many people were in the store at one time. We had some folks waiting outside or in their cars, and we had water for them.”

Still, Noblit added, “it wasn’t a huge issue for us, to be honest. I can imagine a retail store that sees a lot more foot traffic, like a small grocery store or a small drugstore — they’re more affected.”

No matter to what extent each business is affected by capacity limits, they collectively cheered Gov. Charlie Baker’s raising of those limits from 25% to 40% on Feb. 8.

For many operations just trying to survive, every bit helps, especially when they’ve not only followed state mandates for keeping their workplaces safe, but in many ways gone above and beyond, said Nancy Creed, president of the Springfield Regional Chamber.

Nancy Creed says businesses have become adept at pivoting

Nancy Creed says businesses have become adept at pivoting and dealing with state mandates, but some, like restaurants, have been especially challenged economically.

“I have to give our business community a lot of credit because when sector-specific protocols came out, and everyone needed to sanitize all these things to keep people safe, they stepped up to the plate, and did that at a lot of expense to themselves. They deserve a lot of credit.

“I really think it’s a testament to our community that the business community said, ‘we want to be part of the solution and not part of the problem,’” she added. “I give them a lot of credit because they could have thrown in the towel if they wanted to.”

Raising capacity limits isn’t a cure-all to businesses’ struggles, of course, especially when the governor has moved in both directions in the past year, loosening restrictions only to tighten them again. But it’s a start.

 

Traffic Report

Businesses affected by the capacity change include restaurants, arcades and recreational businesses, driving and flight schools, gyms and health clubs, libraries, museums, retail stores, offices, places of worship, and movie theaters, to name a few. Workers and staff do not count toward the occupancy count for restaurants and close-contact personal services.

“Clearly, the restaurant industry has been the most impacted,” Creed said. “With other business sectors and office workers, it’s easier for them to reduce their capacity limits because they can work remotely. And small restaurants have struggled the most — when you have six or eight tables to begin with, it’s not worth doing in-person dining if you have to scale down to one or two tables.”

While some sectors are struggling more than others, she added, most members she’s heard from understand the reasons for the state’s mandates, even when they feel they’re too strict.

“I’m not hearing people complain as much; I think they’re now used to it and able to figure out what to do. I’m hearing a lot of stories of restaurants that are doing well with takeout, which helps make up for the low capacity, but it’s still not easy.”

The same goes for outdoor dining — like takeout, a feature many restaurants either launched or vastly expanded out of necessity, but plan to stick with post-pandemic.

“A lot of places will continue with that because they can expand their capacity with outdoor dining and had such success with it,” Creed said. “Customers are telling them, ‘we’ve always wanted outdoor dining, and we hope you keep it.’”

Yankee Mattress saw intriguing changes in customer behavior as well.

“The number of people who don’t want to stop in, we made up for over the phones,” Noblit said, noting that 2020 was a strong year for online sales as well. “Because of the shutdown, we were closed almost three months, and during that period of time, the only way you could get a mattress was online.”

Nick Noblit says he’s had to manage overflow lines rarely during the pandemic, most notably during tax-free weekend in August.

Even after stores were allowed to open later that spring, many customers continued to use the online option, which was a bit surprising, he added. “This is definitely an item, I believe, you should try before, so you know what’s comfortable for you. But it was a sign that our customers in this area took the pandemic very seriously and are taking precautions, and if that meant calling over the phone and making decisions based on our products and our name, that’s OK too.”

While companies have rolled with the capacity changes, and, as noted, honed new ways to do business in the long term, what they don’t like is sudden change, like what happened in Amherst and Hadley last week.

On Feb. 8 — the morning the 40% capacity change went into effect statewide — the Amherst Board of Health issued an emergency order that will continue the 25% limit in town, as well as an early-closing order, due to an outbreak of COVID-19 on the UMass Amherst campus that, at press time, had risen to 540 cases. The town of Hadley followed, also keeping capacity levels at 25%.

“This is not the direction that we, as a town, nor our businesses, want to go, but it is imperative that the town take decisive action immediately to address this increase in cases,” Amherst Town Manager Paul Bockelman said.

Claudia Pazmany, executive director of the Amherst Area Chamber of Commerce, which has members in both towns, said some businesses chose to close completely for two weeks, either for safety or because UMass students are quarantined to their rooms for the time being, cutting off a supply of customers and, in many cases, employees.

“They’re crushed. They were finally opening at 40%,” Pazmany said, adding that some businesses consider the move unfair, especially the ones that have a strong track record in safety, sanitization, and keeping exposure down over the past year.

“As a chamber, we’re so concerned for everyone’s safety, and a lot of businesses are choosing to close temporarily for the safety of their staff,” she added. “Personally, I don’t want to see anyone struggling, but we want to keep the safety of businesses and the community paramount. It’s tricky; it’s such a layered issue.”

Even as the extension order went down, Amherst Public Health Director Emma Dragon emphasized that “it is in the interest of the health of our entire community that we continue the restrictions that are currently in place. Never has it been more important to follow those key public-health protocols of wearing a mask, washing hands, and maintaining social distance.”

 

Doing Their Part

Mention those tips to many business owners, and they’ll say they’ve been insisting on all that — and much more — from the beginning. “The biggest thing, early on, was the uncertainty, not knowing how the surge was going to affect us,” said Dr. K. Francis Lee, owner of Advanced Vein Care Center in Springfield.

But there are lessons, he says, in how his office responded to the pandemic — and continue to respond — that apply to many places of business. The first was making sure employees understood safety protocols and the importance of keeping themselves out of harm’s way.

“We immediately talked to our staff about their concerns, and our staff came to understand that this pandemic was real, and something that affects everyone’s bottom line — not just the business bottom line, but each person’s bottom line,” he said. “Our people took this very seriously, and everyone knew they had to behave in a way that minimized exposure and minimized transmission, to not bring it into the office and spread it amongst each other.”

The second step was communicating with patients, who were screened twice by phone before appointments — with questions about possible COVID exposure — and then again on the day of the appointment. If there was any doubt, patients were rescheduled or moved to telehealth visits.

“This is something that hits close to home for each individual; at the end of the day, it’s all about their jobs and our business functioning, and people are responsible for doing their part.”

Finally, Lee put in physical safeguards in the office, from PPE — he collected so much, he was able to donate 1,000 facemasks to Baystate Health last April — to installing 22 HEPA-filter air purifiers, at least one for every room. “We have a 50-page COVID safety protocol,” he added.

For customers who visit Yankee Mattress, Noblit said, the store is completely sanitized multiple times a day, with attention paid to common touch points like door handles and surfaces, while customers are given a sanitary sheet — he calls it a ‘comfort test guard’ — to lay on as they try various mattresses. Plastic barriers also went up at counters to separate customers from staff.

“We wanted customers to feel safe and come in and do what they needed to do, and not have to worry about any issues with that,” he noted.

Making people feel confident to go about their business should be a community-wide effort, Lee suggested.

“It comes down to normalizing people’s behavior. That involves dealing with the COVID virus itself, which involves paying a lot of attention to science, and that’s what we did in the first place. We started inside people’s heads — we helped our people understand that this is real, and if people screw up, the whole office could shut down. But we never had to shut down — except for April and May, when everyone was shut down.

“Everyone understood this was their own job security at stake,” he continued. “Major workplaces have been shut down because of this. This is something that hits close to home for each individual; at the end of the day, it’s all about their jobs and our business functioning, and people are responsible for doing their part.”

For just about every customer-facing business, there’s a balance to strike between commerce and safety. Because Excel isn’t just a gym, but a full therapy practice, Hulseberg doesn’t have to maintain a laser focus on gym membership. “Our gym, at its core, is a love note to our patients,” she said. “We tend to run our gym differently than the big chain conglomerates, so the limits have hurt us less.”

Specifically, during the past several months of 25% capacity, she sold memberships only up to that level.

“I don’t want people buying memberships and then finding it too occupied or they don’t feel safe,” she said, adding that she implemented a timed appointment platform online, but members can also call last minute to check on availability. “It gives everyone peace of mind that we’re here for a massage or a group class, but everything has a cap on it, and we have safety requirements in mind.”

 

Winds of Change

In fact, even though the state has raised the capacity limit to 40%, Hulseberg is keeping it at 25% — for now.

“We’ve had a year’s experience with this,” she said. “We’re going to wait to implement any of their changes because they tend to roll back on us, and we end up spending time and money implementing new changes, just to have them roll back in a week or two.”

Besides, she said, she doesn’t want to be part of the problem that leads to a spike — although gyms and wellness practices, by and large, have not been identified as viral-spread locations. “We’re just happy we’re hanging on thus far and people are enthusiastic about what we’re doing, so we don’t have to close our doors.”

The worry that loosened restrictions can just as easily be re-tightened is common to most businesses, Pazmany said.

“The one guarantee this year is that whatever we’re dealing with today will change tomorrow,” she said, and that reality has worn on business owners, especially those in Amherst and Hadley, who can’t seem to catch a break right now — and who continue to remind customers that they’re still open for business.

“They are exhausted,” she added. “They’ve implemented safety protocols, they’ve kept everyone safe, they’re building confidence because they want everyone back. They’ve proven you can trust them, and trust is everything to a small business. So they were excited to expand to 40%. I can tell you, if this is prolonged, it could mean more closures. They need to get to 40%.”

It’s a reminder that all these numbers — case counts, capacity limits, profit-and-loss statements — add up to something significant for a regional business community that’s just trying to get back to normal … or, whatever capacity level passes for normal these days.

 

Joseph Bednar can be reached at [email protected]

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Impact Statements

Jeanette Wilburn (left) and Stephanie Nascimento

Jeanette Wilburn (left) and Stephanie Nascimento say the pandemic has increased people’s anxiety — and the need for self-care.

Stephanie Nascimento and Jeanette Wilburn have long explored the connections between physical and emotional health at their decade-old practice, Be Vital Wellness. These days, they say, with so much anxiety gripping Americans, it’s more critical than ever to understand those connections.

“Obviously, mental illness has always been a crisis, but it’s at an all-time high now,” Nascimento said. “We spend a lot of time digging with our clients. They don’t always walk in the door and say, ‘I’m depressed.’”

In fact, the Hadley-based business began as a weight-loss and nutrition enterprise, and that’s still a major part of it. But Wilburn said it’s gratifying when clients begin to understand how their choices and circumstances affect them in ways they’ve never considered.

“Sometimes people don’t even know they’re depressed; they don’t know they’re anxious,” she explained. “They just know that they can’t fall asleep, or they can’t stay asleep, or they wake up at 3 o’clock in the morning. A lot of people call it ‘busy brain,’ but they don’t realize that’s actually anxiety. I liken it to a hamster on a wheel, and the hamster is going way too fast. You need to either slow down the wheel or get the hamster off the wheel altogether.”

The problem is, almost a year of living with the COVID-19 pandemic, and its impacts on physical and mental health, relationships, and finances, has only cranked the wheel faster, and too many people are coping with unhealthy habits like overeating and alcohol abuse.

“ I liken it to a hamster on a wheel, and the hamster is going way too fast. You need to either slow down the wheel or get the hamster off the wheel altogether.”

“Those bad habits were there before COVID — then the pandemic arrived,” Nascimento said. “There’s so much fear, not to mention people’s whole lives are changing. Kids are home from school, parents are trying to be teachers while also working and managing Zoom calls … there’s been a lot of stress on families. We’ve had clients who were managing well, but are now struggling to maintain good habits.”

Kristy Navarro, clinical supervisor for BestLife Emotional Health & Wellness Center, a program of MHA, said the causes of increased anxiety are easy to understand.

“A lot of it is the stress people are going through financially. People have had to close down businesses they owned and lost all their income. So that produces this feeling of anxiety — ‘where am I going to get the money to pay my bills? How am I going to stay in my house? I wasn’t in debt, and now I am, so how am I going to do this?’”

That anxiety can manifest in different ways, she added.

Alane Burgess (left) and Kristy Navarro

Alane Burgess (left) and Kristy Navarro say the first step to dealing with anxiety and mental-health stresses is talking about them.

“It can be physical — the shaking, the heart pounding, sweating. It can look like avoidance — maybe not checking your mail or not going outside. It’s not just being worried, but genuine fear. Fear and feeling worried are two different things.”

Dr. Mark Kenton says healthcare workers have been feeling anxious, to varying degrees, since the start of the pandemic.

“The anxiety, depression, and worry all got heightened,” he said, especially in the early days last winter, when so little was known about coronavirus, and news media reported on soaring death counts in places like New York City. “It made you think, ‘if I get this, am I going to die?’ You think of the worst-case scenario. Healthcare providers had that anxiety, and a lot of us had to find ways to get through.”

These days, as the pandemic wears on, Kenton, an emergency medicine physician at Mercy Medical Center, still worries about such issues — and not just for providers.

“I’m definitely worried about healthcare providers getting exhausted or getting sick, but also the mental health of patients, and especially the mental health of children who have to do this remote schooling for a year and a half. What is the actual impact on children going forward?”

It’s a question being asked across the U.S., and it has no one-size-fits-all answer. But the overwhelming sentiment BusinessWest heard from health and wellness experts in the region is this: help is available. Don’t be afraid to ask for it.

 

Take Control — but Know When to Let Go

Navarro said much of the anxiety and depression related to the pandemic has to do with isolation — and not just physical isolation.

“We’re asking people to physically isolate,” Navarro said. “What’s more concerning is when we emotionally disconnect from people — the inability to reach out, or to get the support we need when we feel we need it.”

Kenton agreed. “Our lives have been completely turned upside-down. We’re supposed to be social beings; that’s part of our underlying nature. Now everyone has lost that element. We have elderly people who have been completely isolated and haven’t seen loved ones since March.”

It doesn’t help that many things people like to do to escape from their troubles — and get some exercise — have been eliminated or limited.

Dr. Mark Kenton

Dr. Mark Kenton

“Our lives have been completely turned upside-down. We’re supposed to be social beings; that’s part of our underlying nature. Now everyone has lost that element.”

“They gain weight, they don’t eat well, they get depressed or drink more alcohol. It’s a vicious cycle,” he said. “We already have difficult winters in the Northeast, between the snow and the cold; we can’t do much of anything, and now we’re completely isolated at home. We can’t even take a trip to Florida with the family for a week to get away from the cold weather.”

That said, many activities are still possible, Navarro said.

“What is it you like to do? If we’re able to continue to do those things that we enjoy doing, we can feel better,” she explained. “And also, what in this situation can you control? We know that COVID is out of our control. So, what is it that you can control in that context? Maybe the only thing you can control is wearing your mask outside and not being around other people. So control that piece, and have ownership over what you are able to do.”

Alane Burgess, clinic director at BestLife, tells clients to take some time every single day — even if it’s just 10 minutes, although 30 minutes would be better — to “relax and rejuvenate.”

“That means, allow yourself to take that step back from everything that’s going on — all the fears, the worries, and the anxieties — and do something that makes you feel really good about yourself. Maybe it’s a hobby or activity, or doing a teleconference with a family member or a loved one or somebody who is really going to make you feel good about yourself. That way, you can focus on the good feelings that some people are losing in the midst of the isolation and all the things in our lives that we can’t control.”

Wilburn promotes mindfulness, meditation, healthy eating, and a host of other ways in which people have the power to change their health and mindset — and, again, she’s a believer in the two being intertwined holistically. At a time when the world presents so many reasons to be anxious — and, if you read the news these days, it’s not just COVID-19 — she wants to teach people self-care.

“We don’t know about that as Americans,” Nascimento added. “Or we think it’s selfish. ‘Push harder, push harder, don’t take vacations.’ We’re teaching people you can work hard, but your play should be self-care — taking a long walk, getting body work done, taking five minutes to meditate.”

It’s important, Wilburn noted, because, even in better times, Americans too often live in fight-or-flight mode.

“Our nervous systems think we’re running away from a tiger, which means we’re not properly digesting our food, our heart rate doesn’t come down, and we’re not sleeping as well, because if you’re running away from a tiger, why would you be sleeping?”

She and Nascimento say people need to be educated on why it’s important to step back and take time for their own needs — but they also often need permission, especially men, who are quicker than women to dismiss the need for self-care. They’ll find that encouragement at Be Vital Wellness.

“They think, ‘I’m tough; I just need to tough this out,’” Wilburn said. “Women are better at it, but everyone needs permission.”

 

Don’t Ignore the Signs

While mental-health concerns have certainly been at the forefront lately, Kenton said it’s also important not to neglect physical health, especially when symptoms of serious problems arise.

“Looking back to March and April, we shut everything down and told patients that, unless they absolutely need to be in the Emergency Department, do not come,” he explained, noting that many patients use the ER as primary care because they lack a primary-care provider or health insurance. “We saw the wave in New York, then Boston, and we didn’t know what we were in for, so the message was, don’t come to the ER unless you’re sick.”

It worked — Mercy’s ER traffic fell from a daily average of around 225 to 110, with a low point of 72. And that caused concerns of a different kind.

“Before long, we were all wondering, where did the appendicitis go? Where did the heart attacks go? We started to worry that patients with symptoms were staying home, or coming in after four days of symptoms, and by then it’s really bad.”

By summer, ER volumes gradually rose again, but many patients still feared coming to the hospital — and still do — despite the safety measures in place to separate COVID-19 patients from those who have not been exposed. With elective surgeries being curtailed again and patients having trouble seeing their primary-care doctors in person — though telehealth is better than nothing — “there are a lot of challenges for patients trying to navigate the healthcare system right now,” Kenton said.

The challenges for kids and teenagers, on the other hand, have resided almost completely in the realm of mental and emotional health.

“We’re definitely seeing the impact on children,” Navarro said. “I’ve heard a lot of parents say to me, ‘my child is failing all their classes. They can’t concentrate.’ I’ve had children I work with talk about how there’s just too much, there’s not a break, there’s not a way to leave a home that maybe is having some turmoil — not being able to get a break from all that. They’re not going to school and having any socialization with friends. Yes, they see them through Zoom, but they’re not able to have those close conversations, the play time, those moments of friendship.”

One key, she said, is to keep kids connected, somehow, to other people, even if it’s just family, and don’t let them suffer in silence.

“I tell parents all the time, ‘talk to them. Have those conversations. Talk to them about what is going on, how they can cope with their feelings in an age-appropriate way.’”

For anyone struggling in any way — adults or children — it can be helpful to seek professional help. “Even with the smallest amount of anxiety, it does not hurt to talk to someone, whether it’s a professional or a friend or family member you trust,” Navarro said. “To talk about our feelings helps us gain control over them. Just talk to someone.”

MHA launched a program a couple of years ago called “Start Talking,” which promoted the importance of starting a conversation on mental-health concerns.

“Sometimes, when we just start talking to someone we trust — or, for some people, it may be a stranger they feel most comfortable talking to — when we start having a dialogue, we see how many things start coming up,” Burgess said, adding that holding these feelings in often causes them to fester and build, compounding anxiety and depression in the long run.

“People ask every day, ‘how are you?’” Navarro noted. “But when do you actually have the opportunity to tell someone how you really are? What do we usually say? ‘I’m good. Things are fine.’ But are they really?”

Most people have no problem talking about their physical pain — an aching back, for example — but feel stigmatized when it comes to discussing their emotional wellness, Burgess added. But if there was ever a time to push past that barrier, the era of COVID-19 is it.

“Every single person in the world is being impacted by this on some level. This is something we’re all collaboratively experiencing and going through — at different degrees for different people, of course. So, how do we manage a continuation of something many of us thought would end in April?”

Talking about it, she said, is a good place to begin.

With social-distancing regulations in place, telehealth has been a tremendous help for providers and clients in her field, she added, as it has helped clients continue critical conversations. One patient even kept an appointment while on vacation in Aruba because she didn’t want to miss one.

“I’m grateful for the ability to provide services this way,” Navarro added. “If we weren’t, it would be a very difficult world.”

 

Journey to Wellness

Many clients at Be Vital Wellness are folks who deal with crisis every day — firefighters, police officers, doctors, nurses, EMTs — and who have grappled with their own rising anxiety and depression during an unprecedented year.

“PTSD is definitely a thing for anyone in crisis care. They often don’t realize there are other options besides pharmaceuticals, and that they can increase their quality of life, decrease their stress, and decrease their anxiety,” Wilburn said, although she and Nascimento encourage clients to see their primary-care doctors regularly too, as part of a network of treatment.

“I feel like, in America, most people have depression or anxiety or both, and COVID has only upped the ante on all those things,” Wilburn noted. “People who previously didn’t struggle with those things are struggling with those things. I just saw a woman this morning — she’s dealing with severe depression, and we’re talking about getting into therapy.

“We’re not a one-stop shop,” she added. “People come to us and say, ‘help me with my weight loss,’ but then they realize there are a lot of other things they can get support around, and it becomes truly wellness.”

In this unsettled time, that’s a goal worth striving for — and talking about.

 

Joseph Bednar can be reached at [email protected]

 

Coronavirus Cover Story

Pandemic Tests the Mettle of the Region’s Small Businesses

Over the course of this long, trying year, BusinessWest has offered a number of what we call ‘COVID stories.’ These are the stories of small-business owners coping with a changed world and challenges they could not possibly have foreseen a year ago. As this year draws to a close, we offer more of these sagas. Like those we documented before, they put on full display the perseverance, imagination, and entrepreneurial will that has defined the business community’s response to the pandemic.

Things Are Heating Up

Hot Oven Cookies Seizes Growth Opportunities During Pandemic


COVID Tails

Pandemic Has Forced This ‘Pet Resort’ to Consolidate and Pivot


Words to Live By

Greenfield Recorder Stays Locally Focused on Pandemic — and Everything Else


The Latest Word

At Hadley Printing, the Presses Have Started Rolling Again


Root Causes

For This Dental Practice, COVID Has Brought Myriad Challenges

 

Coronavirus

Root Causes

Dr. Ronald Goldsher

Dr. Ronald Goldsher says COVID has brought a host of new challenges for his practice, but also some rewards in the form of being able to help patients in need.

In many ways, Dr. Ronald Goldsher says, dentists and periodontists were better-prepared for COVID-19 than many others in healthcare, and certainly most business owners not in that sector.

“In some respects, dentists are way ahead of the curve because of what happened years ago with the AIDS epidemic,” said Goldsher, owner of Pioneer Valley Periodontics, which operates offices in Northampton and Greenfield. “At that time, there were a lot of mandated changes in infection control, so we’re used to sterilizing everything, using barriers on equipment, wearing masks, and disinfecting surfaces between patients; we may have ramped things up a bit [since COVID], but we were used to doing all that.”

But being better prepared certainly didn’t mean Goldsher and others in this profession were fully prepared for all that COVID-19 would throw at them — from the trepidation of patients to seek needed care to the equipment that would have to be purchased (from PPE to special air filters) to keep staff and patients safe; from confusion regarding what procedures could be carried out (and when) to the sharp reduction in overall business volume.

Add it all up, and it’s been ultra-challenging and even unnerving, said Goldsher, before adding quickly that it has also been rewarding at times. Indeed, to be open and able to provide needed services to those in need, especially those with emergencies, has been gratifying, he told BusinessWest.

“Every day, I have patients thanking me for being open and doing what I’m doing,” he said. “Some people tell me stories about how they have food delivered outside their home, their mail goes into plastic bags and they wait several days until they open it, they don’t exchange any money and they don’t leave their house — but they come to their dental appointment because it’s been eight months, and they used to come every two or three months to get their teeth cleaned, and they haven’t had a cleaning in a year. They’re so happy we’re open and providing this service, and, in their words, we’re taking risks to see patients. That’s brings a lot of lot of joy to my practice and my staff.”

Playing back the tape from a trying 2020, Goldsher said he was skiing in Colorado in late February as the news about the virus started to intensify. By the time he returned in early March, things were still normal, but soon began to change in a profound way — for both his business ventures; he and his sons also operate the entertainment venue Hawks & Reed in downtown Greenfield.

“In some respects, dentists are way ahead of the curve because of what happened years ago with the AIDS epidemic.”

Hawks & Reed had to close down, as all indoor performance venues did, and the periodontal office did as well, starting March 13.

“We shut down for what we thought would be two weeks, and two weeks turned out to be almost three months,” he explained, adding that the green light to reopen came in late May, only to have that date come and then be moved back another week, forcing the practice to reschedule a number of appointments and inconvenience several patients — and staff as well.

“There was a lot of confusing information, even when were ready to reopen Pioneer Valley Periodontics; the timelines that were given us by the governor were convoluted and confusing,” he said, noting that these adjectives also describe the information coming out about which procedures fell into the category of ‘essential’ — those that could be undertaken at that time — and which ones didn’t.

But gaining clarification on such matters was just one of the struggles, he went on.

“We were available on an emergency basis, but that comes with a lot of other issues,” he explained. “Like having staff that can come in in an emergency — they can’t be there all the time — and preparing the office for those emergencies.”

As noted earlier, Goldsher said dental practices in general were in some ways better-prepared for this pandemic because of safety measures that have been in place for some time. And his practice was even better-prepared than that in some respects because of the way he had stockpiled PPE over the years.

“I had thousands of surgical gowns that I collected over the years from doing implants,” he explained. “They come in a pack — there would be four or five in a package; we’d use two, and there would be two or three left over. The staff would always say, ‘let’s just throw these away,’ and I would say, ‘put them in a bag.’ We had garbage bags filled with gowns, so we were able to donate several thousand of them to Baystate Franklin Medical Center.”

Still, the pandemic has tested this practice in myriad ways, he went on, speaking for all those in healthcare when he mentioned everything from maintaining adequate staffing to coping with sharply reduced patient volumes, to simply dealing with all the unknowns, not to mention the emotional trauma of seeing patients in the middle of a pandemic.

“Despite all those precautions we were taking, it was still a little unnerving, and it took a couple of weeks for people to settle down because the psychological impact of the virus was there; you can’t see it, but it’s there,” he noted, adding that the spouse of one patient treated by the staff developed COVID-19 and eventually died.

As the calendar turns to 2021, the practice is coping with patient volumes far below what would be considered normal, said Goldsher, mostly due to a fear factor that has always been prevalent, but has kicked into an even higher gear amid the recent spike in cases.

“Patients will cancel at the very last minute depending on the news of the day,” he told BusinessWest, adding that overall revenues are down probably 35% or more for the year, this on top of all those additional expenses. “And from the top levels on down, there has been a lot of confusing information that’s been disseminated.”

He’s not sure when something approaching normal will return, but he does know that challenges remain and it will be some time before there is significant improvement for those in the field.

As he said, being better-prepared certainly helped, but it didn’t fully prepare anyone for what this unforgettable year has brought.

 

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

Coronavirus

The Latest Word

Chris (left) and Greg Derosiers

Chris (left) and Greg Derosiers say Hadley Printing is back to something approximating normal, and employees have actually logged some overtime.

 

Chris Derosiers was searching for a way to describe what things were like last spring, at the height of what’s now being called the first COVID-19 surge.

And he found an analogy that probably works for just about every small-business owner in this region.

“It’s like being on the highway … you’re going to 65, 70 miles an hour and cruising along nicely, but with three-quarters of your trip still in front of you,” he said, effectively summing up how things were going during Q1 at Hadley Printing, the family-owned venture he serves as president. “And then … it’s like hitting a wall of traffic, and you don’t know how long that wall of traffic is. And six or seven months later, we’re just finally getting to the other side of that traffic jam.”

By that, he meant the company has been experiencing gradual improvement over the past several months, and is approaching something approximating normal: business that is off perhaps 10% from last year. Recently, and for the first time since the pandemic started, the workflow was such that team members were actually able to earn some overtime, a much-celebrated milestone because of what they believe it indicates.

What isn’t known is whether the company will hit another wall of traffic, or when, said Chris’s brother, Greg, the company’s vice president, adding quickly that this puts Hadley Printing in the same position as just about every company during the pandemic — an unsettling place, to be sure.

“What we don’t know is whether this ‘back to normal’ will stay that way, or whether there will be another cycle where people pull back a little bit,” he told BusinessWest, adding that the best this company, or any company, can do is find ways to cope and persevere until times improve.

Flashing back to mid-March, a painful exercise for most every business owner in the region, the brothers Derosiers recounted how their venture hit that proverbial traffic jam.

“When this thing broke back in March, we were doing just great; everything was rocking and rolling, and we had a ton of work in here,” said Greg, adding that things changed abruptly and profoundly. “Every time we picked up the phone or answered an e-mail in the second half of March, it was ‘cancel this,’ or ‘please put this on hold.’ Literally, everything was just getting stopped in its tracks.”

Elaborating, the two said that print jobs of all kinds and sizes were being shelved, and for various reasons. Cost was one of them, obviously, but in the case of the 2020-21 schedule for the Springfield Symphony Orchestra, for example, it was a case of need — or lack thereof. Organizers had no idea when they could next stage live concerts, so there was no need for a schedule. And in the case of annual appeals launched by colleges and nonprofits (and there are traditionally many of those throughout the year), those leading area institutions decided the peak of a pandemic was certainly not the time to be waging such a campaign.

“Every time we picked up the phone or answered an e-mail in the second half of March, it was ‘cancel this,’ or ‘please put this on hold.’ Literally, everything was just getting stopped in its tracks.”

Add it all up, and the phone kept ringing, and each time it did, the person at the other end was canceling an order.

“And Chris and I looked at each other and went, ‘whoa.’ We didn’t know whether to look left or right; we didn’t know what was going on,” he went on, adding that, by late April, relief, in the form of PPP and other measures, had been rolled out with the intention of helping companies like Hadley — and the businesses that form their customer base — through what was projected to be eight to 10 weeks of very rough water.

“We all know now that it wasn’t an eight- to 10-week problem,” Greg continued, adding that one of the biggest challenges for this company was not knowing if printing would be deemed essential — status that was eventually earned.

“A lot of the printers rallied together to fight and make the case that printing was essential,” Greg said. “When the governor initially sent out the guidelines on this, the lines were a little blurred; it didn’t say in black and white whether commercial printing was essential.

“The few orders we did get were communication and mailing pieces focused on how to deal with COVID,” including man from hospitals and other healthcare providers, he went on. “Chris actually sent a letter to Governor Baker explaining why printing wasn’t an essential business.”

From the start, the priorities, the two said, were to be conservative with spending and watch every dime, and do everything they could to hang onto to talented, hard-to-replace printing professionals.

“The difficulty that we have in the manufacturing world is that we have some pretty highly trained people who are very good at what they do,” Greg explained. “Finding these people is very difficult, so we don’t want to let our workforce go. And so, for us, the last resort was to lay people off or furlough them; we hung on for as long as we could before we made any decisions like that.”

Fortunately, the company has historically been conservative fiscally, he went on, and had the ability to put money aside and weather a storm of this consequence, although it certainly hasn’t been easy.

“That part has been a blessing, but we need to make that back up,” he went on, adding that the company, which turned some type of corner in September, believes its improved situation is part of a broader pattern within the business community — and society in general — to find ways to cope with the pandemic and not merely cancel or put things off, as was happening in the second and third quarters.

As for 2021, Greg said no one really knows what to expect. He does believe that, because of what businesses went through in 2020, and because they don’t know when ‘normal’ will return, many will remain conservative in their approach — right down to print jobs.

“It’s like walking on a sidewalk on an icy day,” he explained. “You’re going to be careful where you walk and what you do, as opposed to proceeding as usual. I think 2021 will be that way — like walking on ice.”

 

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

Coronavirus

Words to Live By

Joan Livingston

Joan Livingston says reporters are working hard remotely, but she’s looking forward to the unique energy of a full newsroom.

Late last winter, Joan Livingston and her team at the Greenfield Recorder were planning a comprehensive, multi-part series of articles marking the 100th anniversary of women gaining the right to vote in the U.S. But, as businesses of all kinds can attest, plans made in February had a way of shifting in March.

“We were planning a series on suffrage; it was going to run, and we stopped that immediately,” said Livingston, editor in chief of a daily publication that covers some 30 communities in Franklin County and the North Quabbin region. But while the editorial focus may have changed — we at BusinessWest also remember, quite clearly, those early days of all COVID stories, all the time — the Recorder’s philosophy of hyper-local coverage did not change.

“That has remained our focus, how those communities have been impacted,” she said. “We had to shift gears pretty fast. We weren’t expecting this; no one was expecting this.”

Michael Moses, publisher of the Recorder and several other community newspapers in Western Mass. and New Hampshire, remembers closing all the buildings on March 16 and setting up reporters, designers, salespeople, and others at home.

“At that point, everyone wanted to work remotely, so we took steps to make sure they were able to work from home,” Moses said. “Like everyone else, we didn’t have a lot of time for planning for that, but everything came together pretty well. From an IT perspective, we were already teed up with our front-end system for the news to operate from anywhere, and that flexibility certainly helped us. So it was an essentially seamless transition.”

Since then, the newspaper offices have been open to employees who need to use them, from customer-service staff to the business offices, as well as some reporters, but in general, much of the work of producing these daily and weekly publications has continued remotely.

“A few people work only from home, some are hybrid and come in half the week, and then there are people like myself, who work in the newsroom all the time,” Livingston said of the environment at the Recorder, which is headquartered in downtown Greenfield. “We wear masks when we talk to each other, and we practice safe-distancing rules, but I miss that camaraderie, reporters just sitting around and swapping stories. I look forward to getting that back when things turn around eventually.”

That said, “I’m impressed with our hardworking staff,” Livingston went on. “They continue to generate coverage — that’s one good thing the pandemic did not stop. They’ve been great.”

Like all community newspapers with a wide coverage area, the reporters tend to stick to specific geographic beats, getting to know their communities intimately. The pandemic has shuttered municipal offices to the public and canceled annual events, making a reporter’s traditional in-person contacts harder to come by.

“I miss that camaraderie, reporters just sitting around and swapping stories. I look forward to getting that back when things turn around eventually.”

However, “business hasn’t stopped in terms of what’s happening in town governments, which we cover pretty heavily,” she added. “Some of it’s done virtually, we’ve had annual town meetings in cars or a field, and people have been inventive about trying to be safe during this time. That has been nothing like being in person, but we’re doing the best we can with what we have right now.”

At the same time, readers’ reliance on locally generated news is more critical than ever, especially in a year when locals need to understand how COVID-19 affects them personally, yet messages from national media sources and (especially) the internet have ranged at times from sensationalized to misleading.

That reporters are delivering that news by communicating with team members remotely is all the more impressive, Livingston noted. “Our computer system allows us to work anywhere, and that’s really helpful.”

It’s a slightly smaller team these days, too, she added.

“We had some layoffs after a few months [of the pandemic], and the paper got smaller because businesses are struggling and advertising is not their priority. But I’m impressed by the work ethic of the staff because we are down a few people, and hopefully, when things change, we’ll be able to restock those positions. But they’ve picked up the slack, and I’m impressed.”

Moses sees a silver lining in this year’s shifts in the way people work, because the industry was already moving in some ways toward more remote work, or at least asking questions about the best use of physical space.

“This has allowed us to accelerate where we were going anyway, so there are some positives to all this,” he said. “Like everyone else, we’re always trying to find efficiencies, and I want to be able to draw on those efficiencies.”

That’s not to say publishing hasn’t been challenging this year; it certainly has. “No surprise there, but, thankfully, we’ve been able to manage through it, and as difficult as it’s been, everyone has stepped up pretty well, regardless of which part of the business they’re functioning in.”

The Recorder did eventually get to that series on suffrage over the summer, examining the issue over a period of weeks, not only from a national perspective, but also — and maybe more importantly — through the lens of local history, local organizations, and local viewpoints.

That’s how the newspaper has continued to handle COVID-19 as well.

“I’m reminded every day that, on a whole range of subjects, whether or not they’re health-related, we’re helping readers manage through this, giving them critical news they need, and trying to provide them the right local information they wouldn’t be able to get anywhere else,” Moses said. “That’s even more critical now.”

 

Joseph Bednar can be reached at [email protected]

 

Coronavirus

COVID Tails

Chris Pratt, right, and Tracy Faulstick

Chris Pratt, right, and Tracy Faulstick have had to pivot and create new revenue streams, because COVID-19 has left fewer dogs home alone.

“Because no one wants to be left home alone.”

That’s the marketing tagline for a venture called Wagging Tails Pet Resort, and until the middle of last March, it effectively summed up what this company was all about and why it was so successful; dog owners wholeheartedly agreed with that sentiment.

That was true for the boarding side of this operation, obviously, but the day-care component as well, said owner Chris Pratt, who told BusinessWest that many professionals had come to understand the value of leaving a dog in a day-care facility — for companionship and also, in the case of larger, athletic breeds, to work off some off their considerable energy before their master gets home at the end of the day.

But starting in March, most dogs didn’t have to be left home alone. Their owners were working remotely for the most part, if they were still working at all. Meanwhile, very few people were traveling anywhere.

Almost overnight, business for the day care, boarding, and other components of the multi-faceted Wagging Tails operation plummeted, said Pratt, noting that the COVID-19 pandemic could not have come at a worse time for her — not that it’s come at a good time for anyone.

“Going into March, we were overbooked in Hadley … by March 15, we had one dog left, who actually went home with me at night. I called the owner and said, ‘your dog is the only one here; do you mind if I take him home?’ They said, ‘no, please do.’”

That’s because business had been so good at her resort on Russell Street in Hadley that she moved aggressively and opened a second location on Florence Road in Easthampton — the Heritage Farm — last February to handle what had become an overflow.

Just a few weeks later, though, there was no overflow. She said she kept operating both locations as long as she could, but when Thanksgiving came and the numbers of boarding and day-care dogs were just a fraction of what they were a year ago — and not able to generate enough revenue to pay the staff — Pratt was forced to shut down the Hadley operation, with the intent of reopening when things get better.

“We’re combining our resources to get through the winter,” she explained. “And we’ve been very fortunate that a number of customers have decided to make the 15-minute journey across the bridge to bring their dogs here to the farm.”

That farm, all 30 acres of it, like the Hadley setting, is described by Pratt as a one-stop shop for dogs and their owners, offering everything from boarding to grooming; from day care to retail sales of food and other pet supplies; from walking to training. But because there’s less of all that, there’s now even more that people could do during one stop — or a few.

Indeed, Pratt is making the most of the indoor and outdoor spaces at the farm, and now offering new services ranging from horse boarding to riding lessons, to animals (such as several goats that arrived recently) that children and families can visit with.

“There’s a lot of things going on here that families can take part in,” said Tracey Faulstick, a business consultant working with Pratt to revise the Wagging Tails business plan. “There’s farm animals … there’s a lot that families can participate in in terms of training, horse lessons, and more. There’s an entire community here that’s dedicated to taking care of animals and people in a very safe environment.”

Creation of this community is a classic case of pivoting, making do, and trying to earn a living and keep people employed until things get better — a business survival plan, if you will. It’s also another case — among a great many in this region — of a company doing very well and expanding its operations … until the word COVID became part of our lives.

Indeed, as dogs barked parked consistently — and loudly — in the boarding area, Pratt recounted how and why she amended her business plan more than a year ago and put some ambitious expansion plans on the table.

“Hadley was full at the time … we had a waiting list,” she noted, adding that, essentially, all aspects of the business were booming, from the grooming to the training to the boarding and day care. But COVID-19 changed things in a hurry.

“Going into March, we were overbooked in Hadley … by March 15, we had one dog left, who actually went home with me at night,” she recalled. “I called the owner and said, ‘your dog is the only one here; do you mind if I take him home?’ They said, ‘no, please do.’”

But that was just the start. Indeed, restrictions imposed by the governor essentially shut down the grooming and training operations, two reliable revenue sources, for two months. Meanwhile, as noted, few people were traveling anywhere, for work or pleasure, putting a deep dent in the boarding side of the venture.

Some aspects of this business have returned to one extent or another — grooming and training, for example — and the day-care side has bounced back somewhat, as some dog owners realize the value of that service, even if they are home working all day. Pratt is hoping more people get that message.

“Dogs still need to socialize,” she explained. “Even if people are home working and with their dogs, they should still bring them to day care occasionally, to keep them socialized and keep them from getting separation anxiety; it’s better for the dogs. We were seeing, with people who hadn’t been here for weeks, that when they brought the dog back to day care, the dog was so happy, so excited, and so energetic that they lost most of their socialization skills — so we had to reteach them.”

This reteaching is just part of the COVID story at Wagging Tails, an intriguing saga that, like many in this region, involves imagination, perseverance, and entrepreneurial spirit, all of which are needed to get to other side of this pandemic.

 

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

Coronavirus

Things Are Heating Up

For Sheila Coon and her husband, Dan, the pandemic has been a time to expand

For Sheila Coon and her husband, Dan, the pandemic has been a time to expand, not retrench, and set new and ambitious goals for the future.

For many small-business owners, 2020 has been a year to hunker down. To focus on survival. To put plans for expansion on hold and devote time and energy to simply getting to next month, or even next week.

Not so for Sheila and Dan Coon, owners of Hot Oven Cookies.

For them, 2020 has been a year to take their brand to places, and a level, it had never been before, and to foster plans to take it further still in the years to come. It’s been a time to establish themselves downtown and uptown, as they like to say (we’ll explain later), and expand not only the footprint, but also the product lines, including cookie dough by the pint — ‘dough to go,’ as they call it.

There has been some good fortune, or serendipity, if you will, along the way, and some strong evidence that cookies have become a comfort food in the midst of this global pandemic — there’s even talk of a possible cookie shortage for the holidays. But mostly, this has been about entrepreneurial spirit and seizing opportunities when they have come about — traits that have defined this venture from the start.

About a year or so ago, none of what has transpired since seemed likely or even possible. In fact, as Sheila recalls, the husband-and-wife team were thinking about packing it in and turning the oven off for good.

Indeed, by late 2019, the company, then located at 1597 Main St. in Springfield, had endured several months of turmoil with its landlord over conditions that had made it increasingly difficult to do business — no heat in the winter, no air conditioning in the summer, for example. By mid-November, matters had come to a head, and the company had essentially ceased activity in that location, operating for a time out of its Cookie Cart (a food truck of sorts) until its pipes froze in the winter.

The two partners eventually went back to their storefront at the behest of customers, but when they did, it was late February, just before the pandemic arrived and a wave of restrictions on small businesses like this one went into effect.

“My husband and I were thinking, ‘we should probably close and collect unemployment, because this is going to be bad,’” she recalled, adding that, instead of shutting down, they decided to hang in — mostly due to the strong loyalty displayed by long-time customers.

That decision to persevere became just the first of many watershed moments over the past nine months or so. The company has since opened two new locations — one in Sixteen Acres at the Bicentennial Plaza (that’s the ‘uptown’ location) and then another (a replacement for the old site) further south on Main Street in Springfield, in a location formerly, and briefly, occupied by a Delaney’s Market. Both opened just last month.

Sheila knew about the downtown location and had her eye on it — sort of. She had long thought it out of her reach price-wise, but then, there was some of that serendipity.

“My husband and I were thinking, ‘we should probably close and collect unemployment, because this is going to be bad.’”

“I remember saying to someone, ‘if I could open up where Delaney’s was, I would do it in a heartbeat,’” she told BusinessWest. “It was wishful thinking, but two days later I got a phone call, and someone said, ‘hey, we have the keys, would you like to go see it?’

“We came to see it a few days after we opened Allen Street, and we thought, ‘this is beyond our reach,’” she continued. “But our brand reputation preceded us, and the landlord was extremely willing to work with us because he wanted us here. And here we are.”

In addition to those two locations, the company still operates the Cookie Cart, which has been parked at a number of area colleges, businesses, and even private residences for birthday parties and anniversaries, and also has a kiosk at Bradley International Airport, which has been idled by the pandemic — the one aspect of the venture to be slowed by COVID-19.

As BusinessWest talked with Sheila at the downtown location on a Thursday afternoon a few weeks before Christmas, customers steadily filed into the store. At one point, the line became long enough that she hit pause to go help her employee behind the counter.

It has been like this pretty much since the location opened, she said, adding that the Hot Oven brand — featuring more than 100 flavors, including staples like Dark Chocolate + Seal Salt Chip, Boozy Cake Batter Sugar, and Coquito Snookerdoodle — has always been popular and sought out by those in this market and others residing well outside it.

And the pandemic has made it even more popular, she believes, theorizing that the cookies provide a measure of comfort, a measure of normal, at a time when people are craving both.

Indeed, when asked how the downtown was doing since opening, she started with “wow,” paused for a second, and put it in perspective.

“My husband and I had a logistical meeting before we opened both the shops,” she recalled. “And the conversation went something like this: ‘we’re moving two blocks over to a new location and new customer base, and we’re moving uptown to another location; it’s going to take a while for people to catch on that we’re here.’

“Nope … that hasn’t been the case,” she went on. “Business down here for us has been double or triple what we’re doing two blocks over. And uptown is a beast of a shop — we sell out every day.”

Looking ahead, Sheila said the company is looking forward to the day when the kiosk at Bradley can open and become a strong source of revenue that can finance future expansion — perhaps into Worcester, Boston, and other cities. And there has long been talk of franchising this brand and taking it well beyond its Western Mass. roots.

For the immediate future, though, the two have their hands full with the two new locations and the brisk business they are witnessing.

There have not been too many business-expansion stories during this pandemic, but this is certainly one of them.

Call it a feel-good story if you like, but this is also, and especially, a taste-good story. And a very intriguing one at that.

 

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

Coronavirus Features

Looking Up

Could better times be around the corner? A growing number of executives across the U.S. think so.

In the just-released 2021 National Business Trends Survey from the Employer Associations of America (EAA), 44% of company executives see an improving economic outlook in 2021. This annual survey shares information on what executives nationally are doing to address the changing business climate. Survey responses also reflect the impact COVID-19 has had on this year’s business trends.

When executives were asked if the overall U.S. economy in the next 12 months will “improve, stay the same, or decline,” the largest segment of respondents (44%) think it will improve, as opposed to last year, with only 12% expecting the economy to improve — and that was before the pandemic had come into view. This year, 33% think it will stay the same, as opposed to 52% last year. Only 24% think it will decline, compared to 36% a year ago.

“COVID certainly has had a significant impact, and perhaps many are feeling that the economy can only get better moving forward into 2021,” said Thoran Towler, who chairs the EAA board of directors. “In fact, fueling that optimism, 57% of executives project slight to significant increases in sales and revenue. American businesses are showing their resilience and readiness to tackle today’s challenges and come out stronger than ever before.”

An additional 11 questions were added to this year’s survey regarding COVID-19’s impact on business, addressing employee safety, stay-at-home measures and social distancing, remote work, online interviews and training, hazard pay and bonuses, and candidates who are unwilling to work in the office or out in the field.

When asked how concerned respondents are regarding COVID-19 and its impact on business continuity (specifically the supply chain, financial implications, and temporary shutdowns), 52% indicated they are “extremely to moderately concerned.” In the Northeast, 43% of the region’s executives expect the pandemic to negatively impact business and capital spending either moderately or significantly.

However, companies are already starting to pivot from a focus on pandemic measures to investing in the future. As the charts the two charts demonstrate, respondents expect to put less effort into COVID-specific activities in 2021 than they did in 2020, and more effort into investing in technology, equipment, and other efforts to grow their business.

“The pandemic has forced companies to be agile and innovative during these uncertain times,” said Mark Adams, director of Compliance at the Employers Assoc. of the NorthEast. “While expenditures are being scrutinized now more than ever before, the need to invest strategically nonetheless remains important as businesses seek to position themselves to rebound in 2021 and make up for lost ground.”

Similar to last year’s survey responses, the top three serious challenges for business executives include talent acquisition, talent retention, and the ability to pay competitive wages. The ability to pay for benefit costs and the cost of regulatory compliance rounded out the top five.

Also noteworthy for 2021, 64% of the survey respondents are planning to award wage and salary increases, while 29% plan to award variable pay bonuses next year.

The EAA is a national nonprofit association that provides this annual survey to business executives. The 2021 survey included 1,484 participating organizations throughout the U.S., an increase of nearly 400 over last year’s survey.

Accounting and Tax Planning Coronavirus Special Coverage

Year-end Tax Planning

By Kristina Drzal Houghton, CPA, MST

 

This year has been unlike any other in recent memory. Front and center, the COVID-19 pandemic has touched virtually every aspect of daily living and business activity in 2020. In addition to other financial consequences, the resulting fallout is likely to have a significant impact on year-end tax planning for both individuals and small businesses.

Kristina Drzal Houghton

Kristina Drzal Houghton

Furthermore, if the election of Joe Biden is confirmed and the Republican party does not hold a majority in the Senate following the runoff elections in Georgia, it is likely to affect the tax situation in 2021 and beyond. This article will first address 2020 planning and then summarize some of the Biden tax proposals at the end.

In response to the pandemic, Congress authorized economic-stimulus payments and favorable business loans as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act also features key changes relating to income and payroll taxes. This new law follows close on the heels of the massive Tax Cuts and Jobs Act (TCJA) of 2017. The TCJA revised whole sections of the tax code and includes notable provisions for both individuals and businesses.

This is the time to paint your overall tax picture for 2020. By developing a year-end plan, you can maximize the tax breaks currently on the books and avoid potential pitfalls.

 

BUSINESS TAX PLANNING

Depreciation-related Deductions

Under current law, a business may benefit from a combination of three depreciation-based tax breaks: the Section 179 deduction, ‘bonus’ depreciation, and regular depreciation.

• Place qualified property in service before the end of the year. Typically, a small business can write off most, if not all, of the cost in 2020.

• The maximum Section 179 allowance for 2020 is $1,040,000 provided asset purchases do not exceed $2,590,000.

• Be aware that the Section 179 deduction cannot exceed the taxable income from all your business activities this year. This could limit your deduction for 2020.

• If you buy a heavy-duty SUV or van for business, you may claim a first-year Section 179 deduction of up to $25,000. The ‘luxury car’ limits do not apply to certain heavy-duty vehicles.

• If your deduction is limited due to either the income threshold or the amount of additions, a first-year bonus depreciation deduction of 100% for property placed in 2020 is also available.

• Massachusetts does not follow the bonus depreciation, but does allow the increased Section 179 expense; however, many states do not follow that increased expense either.

 

Business Interest

• Prior to 2018, business interest was fully deductible. But the TCJA generally limited the deduction for business interest to 30% of adjusted taxable income (ATI). Now the CARES Act raises the deduction to 50% of ATI, but only for 2019 and 2020.

• Determine if you qualify for a special exception. The 50%-of-ATI limit does not apply to a business with average gross receipts of $25 million (indexed for inflation) or less for the three prior years. The threshold for 2020 is $26 million.

 

Bad-debt Deduction

During this turbulent year, many small businesses are struggling to stay afloat, resulting in large numbers of outstanding receivables and collectibles.

• Increase your collection activities now. For instance, you may issue a series of dunning letters to debtors asking for payment. Then, if you are still unable to collect the unpaid amount, you can generally write off the debt as a business bad debt in 2020.

• Generally, business bad debts are claimed in the year they become worthless. To qualify as a business bad debt, a loan or advance must have been created or acquired in connection with your business operation and result in a loss to the business entity if it cannot be repaid.

 

Miscellaneous

• If you pay year-end bonuses to employees in 2020, the bonuses are generally deductible by your company and taxable to the employees in 2020. A calendar-year company operating on the accrual basis may be able to deduct bonuses paid as late as March 15, 2021 on its 2020 return.

• Generally, repairs are currently deductible, while capital improvements must be depreciated over time. Therefore, make minor repairs before 2021 to increase your 2020 deduction.

• Switch to cash accounting. Under a TCJA provision, a C-corporation may use this simplified method if average gross receipts for last year exceeded $26 million (up from $5 million).

• An employer can claim a refundable credit for certain family and medical leaves provided to employees. The credit is currently scheduled to expire after 2020.

• Investigate Paycheck Protection Program (PPP) forgiveness. Under the CARES Act, PPP loans may be fully or partially forgiven without tax being imposed. Despite recent guidance, this remains a complex procedure, so consult with your professional tax advisor about the details.

 

INDIVIDUAL TAX PLANNING

Charitable Donations

Generally, itemizers can deduct amounts donated to qualified charitable organizations, as long as substantiation requirements are met. Be aware that the TCJA increased the annual deduction limit on monetary contributions from 50% of adjusted gross income (AGI) to 60% for 2018 through 2025. Even better, the CARES Act raises the threshold to 100% for 2020.

• In addition, the CARES Act authorizes an above-the-line deduction of up to $300 for monetary contributions made by a non-itemizer in 2020 ($600 for a married couple).

• In most cases, you should try to ‘bunch’ charitable donations in the year they will do you the most tax good. For instance, if you will be itemizing in 2020, boost your gift giving at the end of the year. Conversely, if you expect to claim the standard deduction this year, you may decide to postpone contributions to 2021.

• For donations of appreciated property that you have owned longer than one year, you can generally deduct an amount equal to the property’s fair market value (FMV). Otherwise, the deduction is typically limited to your initial cost. Also, other special rules may apply to gifts of property. Notably, the annual deduction for property donations generally cannot exceed 30% of AGI.

• If you donate to a charity by credit card in December — for example, if you make an online contribution — you can still write off the donation on your 2020 return, even if you do not actually pay the credit-card charge until January.

 

Family Income Splitting

The time-tested technique of family income splitting still works. Currently, the top ordinary income-tax rate is 37%, while the rate for taxpayers in the lowest income tax bracket is only 10%. Thus, the tax rate differential between you and a low-taxed family member, such as a child or grandchild, could be as much as 27% — not even counting the 3.8% net investment-income tax (more on this later).

• Shift income-producing property, such as securities, to family members in low tax brackets through direct gifts or trusts. This will lower the overall family tax bill. But remember that you are giving up control over those assets. In other words, you no longer have any legal claim to the property.

• Also, be aware of potential complications caused by the ‘kiddie tax.’ Generally, unearned income above $2,200 received in 2020 by a child younger than age 19, or a child who is a full-time student younger than age 24, is taxed at the top marginal tax rate of the child’s parents. (Recent legislation reverses a TCJA change on the tax treatment.) The kiddie tax could affect family income-splitting strategies at the end of the year.

 

Higher-education Expenses

The tax law provides tax breaks to parents of children in college, subject to certain limits. This often includes a choice between one of two higher-education credits and a tuition-and-fees deduction.

• Typically, you can claim either the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC). The maximum AOTC of $2,500 is available for qualified expenses of each student, while the maximum $2,000 LLC is claimed on a per-family basis. Thus, the AOTC is usually preferable. Both credits are phased out based on modified adjusted gross income (MAGI).

• Alternatively, you may claim the tuition-and-fees deduction, which is either $4,000 or $2,000 before it is phased out based on MAGI. The tuition-and-fees deduction, which has expired and been revived several times, is scheduled to end after 2020, but could be reinstated again by Congress.

• When appropriate, pay qualified expenses for next semester by the end of this year. Generally, the costs will be eligible for a credit or deduction in 2020, even if the semester does not begin until 2021.

 

Medical and Dental Expenses

Previously, taxpayers could only deduct unreimbursed medical and dental expenses above 10% of their AGI. When it is possible, accelerate non-emergency qualifying expenses into this year to benefit from the lower threshold. For instance, if you expect to itemize deductions and have already surpassed the 7.5%-of-AGI threshold this year, or you expect to clear it soon, accelerate elective expenses into 2020. Of course, the 7.5%-of-AGI threshold may be extended again, but you should maximize the tax deduction when you can.

 

Estimated Tax Payments

The IRS requires you to pay federal income tax through any combination of quarterly installments and tax withholding. Otherwise, it may impose an ‘estimated tax’ penalty.

However, no estimated tax penalty is assessed if you meet one of these three ‘safe harbor’ exceptions under the tax law:

• Your annual payments equal at least 90% of your current liability;

• Your annual payments equal at least 100% of the prior year’s tax liability (110% if your AGI for the prior year exceeded $150,000); or

• You make installment payments under an ‘annualized income’ method. This option may be available to taxpayers who receive most of their income during the holiday season.

If you have received unemployment benefits in 2020 — for example, if you lost your job due to the COVID-19 pandemic — remember that those benefits are subject to income tax. Factor this into your estimated tax calculations for the year.

 

Capital Gains and Losses

Frequently, investors time sales of assets such as securities at year-end to produce optimal tax results. For starters, capital gains and losses offset each other. If you show an excess loss for the year, it offsets up to $3,000 of ordinary income before being carried over to the next year. If you sell securities at a loss and reacquire substantially identical securities within 30 days of the sale, the tax loss is disallowed.

• Long-term capital gains from sales of securities owned longer than one year are taxed at a maximum rate of 15%, or 20% for certain high-income investors. Conversely, short-term capital gains are taxed at ordinary income rates reaching up to 37% in 2020.

• Review your investment portfolio. Depending on your situation, you may harvest capital losses to offset gains realized earlier in the year or cherry-pick capital gains that will be partially or wholly absorbed by prior losses.

 

Net Investment-income Tax

In addition to capital-gains tax, a special 3.8% tax applies to the lesser of your net investment income (NII), or the amount by which your modified adjusted gross income (MAGI) for the year exceeds $200,000 for single filers or $250,000 for joint filers. (These thresholds are not indexed for inflation.) The definition of NII includes interest, dividends, capital gains, and income from passive activities, but not Social Security benefits, tax-exempt interest, and distributions from qualified retirement plans and IRAs.

• Assess the amount of your NII and your MAGI at the end of the year. When it is possible, reduce your NII tax liability in 2020 or avoid it altogether.

 

Required Minimum Distributions

As a general rule, you must receive required minimum distributions (RMDs) from qualified retirement plans and IRAs after reaching age 72 (70½ for taxpayers affected prior to 2020). The amount of the RMD is based on IRS life-expectancy tables and your account balance at the end of last year

• Take RMDs in 2020 if you need the cash. Otherwise, you can skip them this year, thanks to a suspension of the usual rules by the CARES Act. There is no requirement to demonstrate any hardship relating to the pandemic. Finally, although RMDs are no longer required in 2020, consider a qualified charitable distribution (QCD). If you are age 70½ or older, you can transfer up to $100,000 of IRA funds directly to a charity. Although the contribution is not deductible, the QCD is exempt from tax. This may benefit your overall tax picture.

 

IRA Rollovers

If you receive a distribution from a qualified retirement plan or IRA, it is generally subject to tax unless you roll it over into another qualified plan or IRA within 60 days. In addition, you may owe a 10% tax penalty on taxable distributions received before age 59½. However, some taxpayers may have more leeway to avoid tax liability in 2020 under a special CARES Act provision.

• Take your time redepositing the funds if it qualifies as a COVID-19-related distribution. The CARES Act gives you three years, instead of the usual 60 days, to redeposit up to $100,000 of funds in a plan or IRA without owing any tax.

• To qualify for this tax break, you (or your spouse, if you are married) must have been diagnosed with COVID-19 or experienced adverse financial consequences due to the virus (e.g., being laid off, having work hours reduced, or being quarantined or furloughed). If you do not replace the funds, the resulting tax is spread evenly over three years.

• This may be a good time to consider a conversion of a traditional IRA to a Roth IRA. With a Roth, future payouts are generally exempt from tax, but you must pay current tax on the converted amount. Have a tax professional help you determine if this makes sense for your situation.

 

Estate and Gift Taxes

Since the turn of the century, Congress has gradually increased the federal estate-tax exemption, while eventually establishing a top estate-tax rate of 40%. The TCJA doubled the exemption from $5 million to $10 million for 2018 through 2025, inflation-indexed to $11.58 million in 2020.

Under the ‘portability provision’ for a married couple, the unused portion of the estate-tax exemption of the first spouse to die may be carried over to the estate of the surviving spouse. This tax break is now permanent.

Finally, guidance has been published establishing that, when the exemption is decreased in the future, a recapture or ‘claw-back’ of the extra exemption used will not be required.

Update your estate plan to reflect current law. You may revise wills and trusts to accommodate the rule allowing portability of the estate-tax exemption. Additionally, consider the maximum gifting currently as allowable in your financial position.

 

Miscellaneous

You can contribute up to $19,500 to a 401(k) in 2020 ($26,000 if you are age 50 or older).

 

BIDEN’S NOTABLE TAX PROPOSALS

Business Tax

• The statutory corporate tax rate would be increased from 21% to 28%.

• The benefits of the Section 199A/qualified business-income deduction would be phased out for individuals with taxable income greater than $400,000.

• The real-estate industry will potentially be impacted. The Biden campaign had suggested potential changes to the §1031 like-kind exchange provisions as well as changes to effectively limit losses that may be utilized by real-estate investors.

 

Individual Tax

Many of the revenue-raising aspects of the Biden tax proposal for individuals apply only to those taxpayers with taxable income over $400,000. It has not been specified whether this threshold is to be adjusted for filing status.

• The top ordinary rate would be restored to 39.6% for taxpayers with income over $400,000. This reflects a return to pre-2017 tax reform when the top ordinary rate was dropped to 37%.

• For top income earners, this rate is currently capped at 20% (plus 3.8% to the extent subject to the net investment-income tax). Under the Biden plan, capital gains and qualified dividends will be subject to the top rate of 39.6% for individuals with more than $1 million in income.

• The Section 199A/qualified business-income deduction would begin to phase out for individuals over $400,000 in taxable income.

• Itemized deductions would be capped to 28% of value. Additionally, benefits would begin to phase out for individuals with taxable income over $400,000.

• The child and dependent care credit would be increased to a maximum of $8,000 for low-income and middle-class families. In addition, the credit would be made refundable.

• First-time homebuyers could receive up to $15,000 of refundable and advanceable tax credit.

• There could be temporary expansion of the child tax credit, depending on the progression of the pandemic and economic conditions. This expansion would increase the credit from $2,000 to $3,000 for children 17 or younger with an additional $600 for children under 6. The credit would also be refundable and allowable to be received in monthly installments.

 

Gift and Estate Tax

The gift- and estate-tax exemption amount would be reduced. Many are suggesting that Biden is looking to reduce the gift- and estate-tax exemption to the pre-TCJA levels.

 

Conclusion

This year-end tax-planning letter is based on the prevailing federal tax laws, rules, and regulations. Of course, it is subject to change, especially if additional tax legislation is enacted by Congress before the end of the year.

Finally, remember that this article is intended to serve only as general guideline. Your personal circumstances will likely require careful examination. u

 

Kristina Drzal Houghton, CPA, MST is partner, Executive Committee, and director of Taxation Services at Meyers Brothers Kalicka; (413) 536-8510.

Coronavirus Features Special Coverage

Tightening the Safety Net

 

Andrew Morehouse stands in the warehouse at the Food Bank’s complex in Hatfield.

Andrew Morehouse stands in the warehouse at the Food Bank’s complex in Hatfield.

As Andrew Morehouse conducted his tour of the facilities at the Food Bank of Western Massachusetts, the sights and sounds helped tell the story that is emerging at this agency — and within this region — at a critical time.

The first thing to notice was the copious amounts of food of all kinds — from sweet potatoes in huge bins to hundreds of cases of canned tuna — now stored at the complex in Hatfield and in other locations as well, destined for local meal sites and food pantries. Indeed, the Food Bank is “over capacity,” as Morehouse, its executive director, put it, because of the soaring numbers of people who are now facing food insecurity in the wake of the pandemic, and the way government agencies, businesses, and individuals have responded to those numbers.

This capacity issue was clearly in evidence, with pallets of food stacked not only on the shelves and the floor space of the warehouse, but in the hallways leading to it as well.

“The warehouse is jam-packed; we’re storing food off site, and we’re moving it faster,” he explained. “We’ve brought on additional staff, we’ve purchased another van, we’re about to purchase another truck so we can move food as quickly as possible. The pandemic has put us over the top in a big way, so we’re looking at options for expansion.”

As for the sounds … well, the Food Bank was mostly quiet at the hour of this visit — late morning, approaching noon — but the few workers on the floor were talking about what they witnessed in the parking lot of Central High School in Springfield, where a drive-thru food-distribution site, supported in part by the Food Bank, has been established. The staffers were talking about long lines of vehicles, and how this has become a constant, or a new norm, with this initiative.

“The warehouse is jam-packed; we’re storing food off site, and we’re moving it faster. We’ve brought on additional staff, we’ve purchased another van, we’re about to purchase another truck so we can move food as quickly as possible. The pandemic has put us over the top in a big way, so we’re looking at options for expansion.”

Meanwhile, fewer people are working at the Hatfield facility, with many more working remotely because of the pandemic, and a host of safety protocols in place to keep those who do come in — and the public in general — safe.

In many ways, the Food Bank — and the hundreds of sites it serves — has become one of the enduring symbols of this pandemic locally. Indeed, just as the bread lines of the mid-1930s became an indelible image that came to represent the Great Depression, the long lines of motorists picking up food — it can no longer be distributed indoors — have come to symbolize this pandemic.

And as fall continues and winter approaches, need is only expected to grow, said Morehouse, who cited projections from Feeding America showing that, by year’s end, an estimated one in six residents in Western Mass. (perhaps 127,000 people) will be experiencing food insecurity, as opposed to one in 10 before the pandemic began, and one in four children. That would be a 40% increase in the number of people overall, and a more than 60% increase in the number of children.

In many ways, such numbers help tell this story. During the fiscal year that just ended Sept. 30, the Food Bank distributed 14.8 million pounds, or the equivalent of 12 million meals — a 23% increase over the previous year, compared to an average 6% increase year over year. Meanwhile, over the past seven months, the increase has been roughly 30% (from 7.3 million pounds to 9.5 million), much higher than the annual increase, obviously, because of the direct impact of the pandemic, and the highest seven-month spike in the agency’s 38-year history.

Behind the numbers, though, is the inspiring story of how the region and its business community have responded to the crisis, said Morehouse, adding that this response was quick and profound, and it is ongoing.

Sweet potatoes from local farms

Sweet potatoes from local farms are among the many items jamming the shelves and floor space at the Food Bank, which is over capacity due to spiking need.

The biggest question concerns what comes next, and it’s one that’s hard to answer, he noted, adding that many factors will go into determining where these numbers go in the weeks and months to come.

For this issue, BusinessWest talked at length with Morehouse about the mounting problem of food insecurity in the wake of the pandemic and how his agency has responded. Overall, he said this response “is how the safety net is supposed to work.”

Elaborating, he noted that the Food Bank has been able to meet soaring need because federal and state agencies have stepped up and put more food into the system, but also because the region has stepped up as well.

 

Food for Thought

As he talked about what has transpired since March, when the pandemic arrived in Western Mass., Morehouse said it’s been a period of adjustment — for area residents, for his agency, and even for area farms.

For many, the pandemic left them unemployed or in a position where they were earning less — although generous unemployment benefits certainly helped large numbers of people impacted by the downturn in the economy. But those unemployment benefits also had the unintended consequence of leaving individuals ineligible for SNAP (Supplemental Nutritional Assistance Program) benefits, creating a different kind of problem.

For the Food Bank, the first several weeks of the pandemic were chaotic, he said, as the agency mounted a response to what was happening — but had to do so in the middle of a health crisis.

“There was a lot of uncertainty about how to protect oneself from COVID-19, and suddenly, so many people lost their jobs or were furloughed,” he explained. “There was an outpouring of concern, of wanting to help, from people who don’t know that an emergency food network exists. So we were fielding calls from community groups from all across Western Massachusetts, saying, ‘we want to bring food to the Food Bank,’ or ‘how can we support you?’

“And it took a while for us to connect people to the pantries and meal sites in their communities as a way to support households that were at risk of hunger, because that’s who we work with,” he went on. “We don’t receive individuals who are in need of food assistance at our warehouse, and we don’t deliver food to households; we work through the existing network of about 165 independent pantries and meal sites, plus our own distribution programs to 51 senior centers every month, and on our mobile food bank, which has 26 distribution sites across all four counties on a biweekly or monthly basis.”

When asked how the Food Bank responded to that 30% spike over the past seven months, Morehouse replied with a quick “it wasn’t easy,” before elaborating.

Pallets of food destined for area meal sites and pantries

Pallets of food destined for area meal sites and pantries spills out into the hallways at the Food Bank, clear evidence of soaring need in the region.

“It took us a while to catch up, I’ll be honest,” he told BusinessWest, noting that there were a number of challenges to overcome, starting with disruption to what he called the “supply chain,” meaning donations of food to the agency from individuals and also, and especially, area supermarkets.

“There was a run on those supermarkets, so it was a significant hit,” he recalled, adding that roughly half the food distributed by the agency comes from the private food industry in the form of dry goods, produce, and close to 1 million pounds of meats frozen on the sell-by date.

Beyond this disruption to the supply chain, the Food Bank was impacted by shortages of staff and a loss of many of its distribution sites; several of them closed, including all brown-bag sites for elders and many mobile locations.

Slowly, over time, those sites reopened, while also changing how food was distributed, he noted, adding that as, the spring progressed, the Food Bank adapted to what became a new normal, both in terms of how it operated and with the numbers of people now facing food insecurity.

Indeed, over the period from March to August, the latest information available, the average number of individuals served each month grew to 107,000, Morehouse said, adding that 20,000 of those, or 19%, are people who have never come to a pantry or meal site.

And that percentage of new visitors was much higher, perhaps 40%, in the early weeks of the pandemic, when the layoffs and furloughs started climbing, and before those generous unemployment benefits kicked in. The numbers then leveled off for a time, but they started climbing again, he went on, adding that, when the new six-month numbers come out, the total people being served should far surpass that 107,000 figure.

 

Numbers to Chew On

Behind the numbers is the story of how this rising demand has been met with the help of a number of contributing sources — that safety net Morehouse described earlier.

These include the federal government, state agencies, area businesses, and philanthropic efforts like Jeff Bezos’ $100 million gift to Feeding America’s COVID-19 Response Fund.

“The federal government has stepped up — we’ve received considerably more federal food,” he explained, referring specifically to CARES Act appropriations that enable such agencies to buy more food. “And there was an outpouring of support from individuals, businesses, and regional and state foundations, as well as from Feeding America, the national network of food banks.”

The agency has also received more than $400,000, with another $123,000 coming, from the Massachusetts COVID Relief Fund, he went on, adding that a number of individual businesses, including Big Y and the Antonocci Family Foundation, have made sizable donations as well.

Part of the federal government’s response has come in the form of Farmers to Families Food Boxes, a new program through which the USDA’s Agricultural Marketing Service is partnering with national, regional, and local distributors, whose workforces have been significantly impacted by the closure of restaurants, hotels, and other food-service businesses, to purchase up to $4.5 billion in fresh produce, dairy, and meat products from American producers of all sizes.

Mapleline Farm in Hadley is one of several local farms in the region that have adjusted with the pandemic, now supplying the Food Bank with milk in family-sized packaging.

This program supplies boxes of fresh fruits and vegetables, dairy products, and meat products, which distributors package into family-sized boxes, then transport them to food banks, community and faith-based organizations, and other nonprofits serving Americans in need.

The program has benefited several area farms, said Morehouse, noting that those supplying the boxes are purchasing products from many area farmers who were severely impacted by their inability to sell to restaurants, colleges, and universities closed by the pandemic.

“It took a while for some of these farms to adapt, but many of them have,” he said, citing, as one example, Mapleline Farm in Hadley, a dairy farm whose name and logo were on countless boxes of quart containers of milk in the Food Bank’s warehouse.

As for the future, Morehouse said the contributions that have poured in from individuals and businesses have left the organization in a solid position financially for this current fiscal year, one in which overall need is expected to continue growing, while the economy is projected to continue struggling.

Meanwhile, question marks remain about the ongoing level of support from state and federal governments, as well as from individual contributors, he said, citing the potential for donor fatigue as the pandemic wears on.

“The state is operating on a month-to-month budget, so we’re not even sure if we’re going to be level-funded for a program that we’ve come to rely on for 30% of our food since 1992,” he told BusinessWest. “And the federal government has not passed another stimulus package, so we’re anticipating a decline in federal support.

“We have a jigsaw puzzle of public and private emergency food resources that rely of federal and state funding and private charitable support,” he went on. “We rely on all those sources of support to get the food we need and the resources we need to keep operations afloat.”

One of the important pieces of that puzzle is Monte’s March, the fundraising walk from Springfield to Greenfield that was launched by radio personality Monte Belmonte to benefit the Food Bank. Belmonte has seen the ranks of people joining him on his late-November trek grow steadily over the years, as well as the amount raised for the agency, but that first trend won’t continue this year, as the pandemic is forcing organizers to encourage individuals to support the march remotely — although the top-performing teams when it comes to generating donations will be able to march.

But, given the urgent need for support, they are hoping the second trend will continue. The goal for this year has been raised from the $333,000 mark set last year — each dollar donated buys three meals, so the goal was to fund 1 million meals — to $365,000, or $1,000 a day, or 4,000 meals a day (one dollar now buys four meals, due to greater efficiency).

 

Hard to Digest

Looking at the projections from Feeding America for the next several months, the ones predicting that one in six area residents will be food-insecure, Morehouse had his doubts initially about whether things would really get that bad here.

But now, he’s thinking they may be realistic — painfully realistic, to be more precise — especially when one ponders the unanswerable questions concerning when the pandemic will subside and to what degree the federal government will keep on printing money.

One thing Morehouse does know is that the Food Bank will continue to pivot and respond proactively to the ongoing crisis — right down to finding more warehouse space.

 

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

Coronavirus Health Care Special Coverage

Forward Thinking

A rundown of the big issues facing healthcare 20 years ago would, in some ways, be similar to the same list today, encompassing persistent challenges like hospital finances, staffing shortages in certain specialties, strategies to tackle substance abuse, and diseases like cancer and Alzheimer’s.

Yet, the solutions to those issues have certainly evolved. For example, hospitals have seen a dramatic shift to accountable care, a model in which disparate providers work together and are paid for patient outcomes, not how many procedures they order up. And patients are increasingly active participants in their own care, as are senior-living residents and their families.

Technology has exploded as well over the past two decades, from robotic and minimally invasive surgery to increasingly targeted cancer treatments and rapid advances in prosthetics — not to mention the IT revolution, and the shift to electronic health records, patient portals, and, of course, everyone’s favorite pandemic-driven technology, telemedicine, which, most doctors agree, will continue to play a key role post-COVID-19.

Education has expanded as well. Stroke survival rates are higher these days, partly because people better understand the signs, and so are cancer survival rates, with the public more aware of the importance of screening. In fact, one huge story over the past 20 years has been the rise of preventive wellness and patient education — and keeping people out of the hospital as much as possible.

So, yes, many decades-old concerns of patients remain key concerns in 2020 (along with that whole pandemic thing that has dominated this unusual year). But the way we tackle those issues — with new ideas, new technology, and new facilities — is dramatically different.

To better paint that picture, we asked area health leaders what the next 20 years might hold in the areas of hospital administration, behavioral health, cancer care, and health education. On the following pages are their intriguing perspectives.

What’s Next for Hospitals

What’s Next in Behavioral Health

What’s Next in Cancer Care

What’s Next in Health Education


Coronavirus Cover Story

Battle Fatigue

Meyers Brothers Kalicka

Employees at Meyers Brothers Kalicka crowd around a food truck offering gourmet grilled cheese, one of many initiatives on the part of the company to help boost morale during the pandemic — and a long, difficult tax season.

The food truck from the Log Cabin Banquet & Meeting House pulled into the north parking lot of the PeoplesBank building in Holyoke around 2 p.m. on Oct. 15.

By 2:30, a large number of employees from the accounting and tax-planning firm Meyers Brothers Kalicka had gathered to enjoy gourmet grilled cheese, tomato soup, hard cider, and some pumpkin beers, and to play a little cornhole.

The occasion? The last day of filing for those who sought extensions on their tax returns, and thus another milestone during what has been labeled by those in the accounting realm as the ‘never-ending tax season of 2020.’

But in many ways, the grilled cheese, trimmings, and camaraderie were part of what has become a multi-pronged effort at MBK to help employees cope with all the stress and strain — the battle fatigue, if you will — of what has been the most trying year anyone can remember.

And the company is certainly not alone in this mindset.

Indeed, businesses and nonprofits large and small have been addressing this matter of fatigue and helping employees cope with stress in ways that range from loosened dress codes to those food trucks; from pumpkin-decorating competitions to the ‘concert T-shirt day’ — no explanation needed — staged by MBK.

“There’s a lot of stress, and initially, people were trying to do everything and be 100% in everything, and I think most are now acknowledging that this is not realistic or sustainable.”

Overall, business owners and managers are recognizing that their valued employees — the ones who remain after many others have been furloughed or laid off — are tired, worried about the future, ‘Zoomed out’ (another phrase you hear a lot these days), unable or unwilling to take paid time off, and unable or unwilling to leave work behind when they leave work — whether they’re at the office or at home, said Meredith Wise, president of the Employers Assoc. of the NorthEast (EANE).

And they’re responding, as she is responding herself (EANE has 22 people on its payroll), with policies, formal and informal, and action plans focused on providing some stress relief and perhaps a sense of normalcy in a year when some companies and agencies are offering ‘mental-health days’ in the office instead of at home.

“Our team is feeling it,” said Wise, using ‘it’ to refer to the sum of the stress incurred at work and at home. “We’re having a difficult year here, and everyone is pushing for the numbers and pushing for the registrations and pushing to connect with our members and provide the best service. And then, at home, it’s not like they’re going home and then relaxing and getting away from the pressures and having time to rest and refuel. They’re going home, whether they’re working remotely or working at the office, and they’ve got all the stuff in their personal life.”

Elaborating, she said this collective ‘stuff’ constitutes everything from fear of contracting the virus to negativity on the nightly news, to the inability to do the things they want to do and go to places they want to go.

Add it all up, and it’s exhausting and often overwhelming, she said, adding that, as an employer, she considers it her responsibility to help valued employees cope with all this.

Amy Roberts, senior vice president and chief Human Resources officer at PeoplesBank, agreed. She told BusinessWest that the focus for businesses over the past few months has shifted from dealing with an emergency — getting everyone home and making sure they’re safe — and setting up people to work from home if needed, to coping with this fatigue that has settled in.

MP CPAs in Springfield

The dress code has been thrown away at MP CPAs in Springfield, one of many steps taken to help employees feel more comfortable in the office during these uncertain times.

“One of the things we’ve tried to do through the whole situation is be flexible and creative in working with each person as their own needs evolve,” she explained. “You have parents who have kids in school or at home, or a combination of both, and then you have employees with significant others who are exposed or working in situations that put them in potential harm. There’s a lot of stress, and initially, people were trying to do everything and be 100% in everything, and I think most are now acknowledging that this is not realistic or sustainable.”

“We don’t meet with people in the office generally — we’ve closed our doors. So as long as you’re looking good from the waist up on Zoom meetings, it doesn’t really matter what else you’re wearing.”

As companies continue to find ways to assist employees, they acknowledge that, as the pandemic continues, fall turns to winter, the holidays and all the additional stress they bring on approach, and the days get shorter and darker, these efforts will have to continue and probably expand.

 

Forever in Blue Jeans

Doug Theobald says MP CPAs, the Springfield-based accounting firm, has long had a casual-Friday policy, and it has become quite popular.

These days, though, every day is casual as the company tries to make employees feel happier and more comfortable during this stressful time. And allow them to dress like their colleagues, who are working at home.

“We’ve thrown our dress code out — people have been in shorts and sweats since we came back in May,” Theobald, a principal and president of the company, explained. “We’ve always been business casual, and one of my biggest concerns was that people would be nervous coming back to the office; we wanted to make it as comfortable an environment as possible. We don’t meet with people in the office generally — we’ve closed our doors. So as long as you’re looking good from the waist up on Zoom meetings, it doesn’t really matter what else you’re wearing.

“That’s probably been the most beneficial thing we’ve done,” he went on. “If we get back to a new normal at some point, that might be my biggest hurdle — putting business casual back in place once client meetings start again.”

Meagan Tetreault, standing outside Big Y

Meagan Tetreault, standing outside Big Y’s West Springfield store, says the company has taken an individualized approach to helping its thousands of employees cope with the stress and strain of the pandemic.

In some ways, this new dress code, or lack of one, is merely an extension of strategies put in place before the pandemic, aimed at creating a more appealing workplace at a time when attracting and retaining employees, especially in this sector, was becoming increasingly difficult as the job market tightened.

But it’s also part of a broad effort to help employees cope with all that 2020 is throwing at them, including that never-ending tax season, which will soon give way to the next tax season.

“My team is wiped,” Theobald said on Oct. 15 — again, the last day for those who sought extensions, and there were many in that category this year. “They work hard, and we are the one firm in this area that has a really, really busy fall season; it’s almost busier than April.”

He was planning to close the office down for a few days and give his team a break, another attempt to help them get rest and recreation in a year when there has been much less of both.

“There’s so much stress going on in this world right now, we’re just trying to make it as stress-free in the office as we can,” Theobold went on, noting that efforts ranging from the new dress code to flexible hours; from bringing food into the office more often (even if people can’t eat together) to delivering care packages (mostly snacks) to those working remotely, are efforts that will have to continue as the pandemic wears on.

“A lot of places are scaling back on these kinds of things for various reasons, and I don’t think it’s the time to do that. I think it’s time to put a little more gas on the fire because you don’t want to lose engagement or enthusiasm with your organization.”

Wise agreed, noting that, between work and home, many employees simply don’t seem to be able to get a break from the pressure and stress.

This leads to lack of sleep and even more mental and physical fatigue, she said, adding that matters are compounded by the fact that traditional vacations have become far more difficult to undertake. Indeed, trips to Disney World, cruises to Europe, weeks on the Cape, and even visits to relatives in other states have become daunting, if not impossible, because of the pandemic.

As a result, people are vacationing at home, which is good for the region and its tourism venues — the ones that are open, anyway; Six Flags, the Big E, and many others have not been — but the time off is, in many cases, not as relaxing and therapeutic. Meanwhile, with technology and the pandemic both being what they are, time off is usually not time off from many work stresses.

As a result, Wise and others in positions of leadership are strongly encouraging employees to completely unplug when they are taking a day or a week off.

“We try to encourage people to take their time off and to completely disconnect from the office,” she said. “We’re requiring people, when they’re taking a day off or a half-day off or a week off, to put an ‘out-of-office’ message on all of their devices. And that message should say that they will not be responding to e-mails. I don’t necessarily want to cut off people’s access, but we’re saying, ‘put that out-of-office message on, and don’t respond to anything.’ I can’t stop you from checking, but don’t respond.”

Roberts agreed, and said PeoplesBank has been pushing its workers to use their paid time off.

“When there’s nowhere to go, people are inclined to say, ‘I’ll just work,’” she said. “But over the summer, we were encouraging, and in some ways pushing, people to just take a staycation and unplug from work.”

 

Stressing Some Points

Roberts told BusinessWest it was only a few months into the pandemic when upper management at PeoplesBank recognized that fatigue was becoming an issue and needed to be addressed.

“We’ve had some pretty deliberate management conversations where our president, Tom Senecal, has said to team managers, ‘make sure you’re paying attention to the fatigue factor and that you’re communicating with people in a way that they know you understand that this is a very unique and evolving situation.’

“While we want obviously to meet the needs of the customers and do everything we need to do as a business, we recognize that there’s another side to this,” she went on. “Just acknowledging this and having that conversation with managers gives them that awareness and pushes them in a direction where they’re taking a more flexible approach with their people.”

Meagan Tetreault, senior Employee Services field manager for Big Y Foods, agreed. She told BusinessWest that, as an essential retail business, the company has obviously been open for customers and focused on their safety. But it has been focused on employees and their various needs as well — everything from steps taken to keep them safe to flexibility with schedules to enable them to successfully balance work and life.

“Our first priority was making sure we’re putting in place different protocols to make sure that the environment is as safe and secure as possible — from sanitizing and cleaning to plastic barriers to maintaining that social distance,” she explained. “And at certain points, we limited our staff to maintain that social distancing; in retail, it’s natural that you have to have that interaction with the public, and that can be scary. How do you support them through that? It starts with safety and wellness, and promoting that wellness.”

But, as noted, support has come in many different forms, she noted, including efforts to help the company’s 12,000 employees manage the pandemic. And as she talked about it, Tetreault stressed the need to address each employee individually and, when possible, customize a response.

“We found that it comes down to each individual employee’s needs and wants, and our store teams are a big part of that,” she said. “Our employee-services representatives are in each store to assist with employee needs, identifying opportunities and having some of those individual conversations to find out what works for that particular individual.”

Elaborating, she said the company amended its attendance policies; established something called ‘COVID leave,’ which enabled employees to take time off without losing their status; and created more flexibility for workers.

“Our store hours are 7 a.m. to 9 p.m., but we have people who come in and work overnight shifts as well,” she explained. “And we’re able to work with employees to find a schedule and position them to support their individual needs, be it childcare or even wishing to limit contact with customers.”

 

COVID Coping

Overall, while morale is an issue some companies address at least some of the time, it has become more of a front-burner topic during the pandemic, out of necessity, said those we spoke with.

“We’re seeing morale dip a bit; people are trying to put a good face on it, but it’s becoming harder and harder to do that,” Wise told BusinessWest. “So we’re trying to find things we can be doing to raise morale.”

Such efforts include e-mails on Wednesday reminding people that they can almost see Friday, and other e-mails on Friday telling people to turn their computers off at 4:30, go home, and not think about work over the weekend, or even watch the news.

PeoplesBank conducted its annual Employee Fest this year, but it was decidedly different, with many of the activities carried out remotely.

PeoplesBank conducted its annual Employee Fest this year, but it was decidedly different, with many of the activities carried out remotely.

Region-wide, morale-building efforts run the gamut from food and games to team-building exercises, either in person or the remote variety.

At PeoplesBank, the week-long event known as Employee Fest was staged as always, but it did look and feel different, said Roberts, noting that many activities were carried out remotely, with gifts delivered to all employees, whether they were working at the office, in one of the branches, or remotely.

At MBK, morale-building has been a year-long priority, said Sarah Rose Stack, Marketing & Recruiting manager, adding that it comes in several forms, from so-called social-media holidays, where people post pictures of pets, children, or travel destinations; to the concert T-shirt day, flip-flops day, and alma-mater day; to food trucks, which have come on several occasions.

The company has traditionally done such things, and it has long had what’s been called the ‘Fun Committee,’ which arranged an axe-throwing competition and visit to a brewery last year, for example. This year, the activities are different, but there are more of them, with good reason.

“A lot of places are scaling back on these kinds of things for various reasons, and I don’t think it’s the time to do that,” she noted. “I think it’s time to put a little more gas on the fire because you don’t want to lose engagement or enthusiasm with your organization.”

Many of the initiatives at MBK and elsewhere fall into the broad category of connectivity, an important ingredient for success at any business, and something that’s been lacking due to the pandemic.

Monica Borgatti, chief operating officer for the Women’s Fund of Western Massachusetts, said the small staff of three full-time and three part-time employees has mostly been working remotely since March. That means no water-cooler talk — literally, anyway, she said, adding that the nonprofit has tried to incorporate those types of discussions into the regular Zoom meetings in an effort to help people connect in ways beyond what they’re doing for work every day.

“We always, always make sure to start those weekly meetings with a virtual water cooler,” she told BusinessWest. “Everyone takes turns sharing something, whether it’s an article they’ve come across over the past week or something personal — they got a new dog and they want to show off the pictures, or some household project that they’ve finally completed.

“We make sure to create time for that at all those staff meetings, so we’re connecting with each other as people and not just as co-workers,” she went on, adding that the agency also allows for very flexible schedules and encourages employees to stop and step away from their work when they need to, and not stare at a computer screen for hours on end.

At MBK, one of the partners, Jim Krupienski, stages a monthly check-in social, Stack said, during which the company has a cocktail hour of sorts where those working from home can join in remotely. “It’s just really to check in and talk about anything other than work,” she noted. “It’s a mental-health check-in with adult beverages.”

Scanning the landscape, Wise believes many companies are struggling in their efforts to maintain morale among their employees. It’s easier for a smaller business to undertake initiatives in this regard than those with several hundred employees, she noted, but most are trying to do something.

It might be a food truck or two coming to the parking lot — even sharing a large pizza box can be risky during a pandemic — or more communication from the C-suite, she said, adding that there is more ‘management by walking around’ in this environment, or at least there should be.

Meanwhile, employers are pushing people to take time off and providing more one-on-one employee counseling, duties now falling in many cases to human-resources professionals, especially at smaller companies that do not have employee-assistance programs.

“They’ve had to put on their social work, psychologist’s hat,” she noted. “And it’s not something that they’re used to. But some employees just need to vent; they’re saying, ‘I don’t know what to do or where to go.’”

 

Bottom Line

While no one really knows when the pandemic will subside and something approaching normal returns to the workplaces of Western Mass., what most business owners and managers do know is that their valued employees will need some help getting to that point.

At a time when most e-mail messages end with the message ‘stay safe and stay sane,’ or words to that effect, achieving those goals has been anything but easy.

Addressing this battle fatigue has become an important, and ongoing, assignment for many businesses, and the smart ones understand that the fight is far from over, and they need to keep finding ways to be attentive and creative — and even fun.

 

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

Coronavirus Technology

Remote Connections

Zasco Productions recently held a hybrid drive-in event

Zasco Productions recently held a hybrid drive-in event for a pancreatic-cancer organization — one way it’s filling the void with live events curtailed.

While most of the business world slowed gradually in March, or even ground to an eventual halt, the story was more dire for the events industry.

It just … stopped.

“When the whole country shut down, we were impacted immediately. We were one of the first business sectors to really feel the effects,” said Andrew Jensen, president of Jx2 Productions, noting that among the state’s first orders was barring large — and eventually even modestly sized — gatherings.

Within a day or two, he recalled, “we had no business left, just one or two things left for the rest of the year. Everyone freaked out. From weddings to live events to conferences to concerts, everything was gone overnight. It was non-stop with the phone calls. It was unlike anything I’ve ever felt. When there’s some kind of natural disaster or act of God, everything might be off for a while in one area, but never worldwide like this.”

After hunkering down for a while to get a sense of what was to come, it was time to get off the mat and figure out how to move forward in 2020. In Jensen’s case, like most players in his industry right now, that meant a shift to a new type of virtual, or online, event.

“Like any major shift in business, it’s a learning curve; it’s a challenge to make the transition from only live events with some streaming at them to all streaming events. It was definitely a shift not only in our business, but in the mentality of people asking to do them.”

“Like any major shift in business, it’s a learning curve; it’s a challenge to make the transition from only live events with some streaming at them to all streaming events,” Jensen explained. “It was definitely a shift not only in our business, but in the mentality of people asking to do them.”

The typical live gathering might include livestreams as a secondary factor, he said, mostly at higher-end events; smaller companies typically don’t bring in a secondary audience remotely. “We had to shift our mentality, and that was hard. Did we have redundancies and protocols in place? What if we lose somebody on the other end? How does that effect everyone?”

Michael Zaskey has been dealing with those questions, too, since the industry crashed to a halt in mid-March.

“We were the first to go, and we’ll be the last to come back in a traditional sense,” the owner of Zasco Productions told BusinessWest. “We knew pretty quickly that online and virtual events were going to be the norm for a while.”

At first, companies thought they could take a DIY approach, he added. “Initially, folks were trying to do things with Zoom and GoToMeeting. Those are awesome tools for meetings or small-group sessions, but not for producing events. You can have a board meeting or discussion over Zoom, but if you want to engage and entertain and create an experience similar to a live event, that’s not the right tool. You still need a production company.”

Jx2 Productions has boosted the technology in its control room

Jx2 Productions has boosted the technology in its control room, and out on the road, to meet the needs of a largely virtual event landscape.

The world is figuring that out. Based on projections from Grand View Research, virtual events will grow nearly tenfold over the next decade from $78 billion to $774 billion. And that puts a squeeze on businesses like Jx2 and Zasco.

“People figure a virtual event costs less than a live event because you’re not renting ballroom space, but on the production side, it’s just as expensive, or even more,” Zaskey said. “We’ve tried to be flexible with budgets, but we’re working with a very slim margin.”

It’s a challenge that will remain, at least in the short term.

“Obviously, it will be a long time before live events come back full force,” he added. “Virtual events will never replace a live event, which is so much about the networking, and people miss that. But in this time of pandemic and crisis, they’re viable solutions that allow people to connect and participate.”

 

Technical Concerns

The first thing people need to learn in this new landscape is the terminology, Zaskey said. “Like, when people started using the phrase ‘socially distant,’ I’ve always thought we say that wrong. We should be socially connected and physically distant. Or connected with technology.”

Likewise, people often mean different things when they say ‘virtual event.’ “People started throwing that term around, but it means something different for every person we talk to.”

That’s because, in his world, virtual events have often meant events that occur in a virtual space, like a corporate meeting in which the CEO stands on a virtual stage in front of a greenscreen, backed by a set created electronically, as if standing in a video game or virtual-reality environment. “What most people call a virtual event today, we use the term ‘online event.’ That’s more accurate.”

There are hybrid events, too, which mix in-person and remote elements. “Instead of 500 people in a room, maybe you have 20 smaller rooms with 25 people in each room, physically distanced, and connect those rooms electronically” — a good option even in non-pandemic times for large, national companies that don’t want to fly everyone to one location for an important gathering.

Zasco is also doing some drive-in events, like a recent pancreatic-cancer fundraiser in Connecticut that had been postponed from May. “We wanted to keep our audience engaged, so we did a drive-in event and spaced out the cars, with a large screen outdoors, and you could listen through FM radio.”

While short speeches were delivered on stage — again, in a distanced fashion — the biggest donors and benefactors attended live in their cars, with others able to watch through a webstream.

“We’ve done a number of those for nonprofits, schools, and corporations,” Zaskey said. “That’s been pretty successful. I’ve been impressed how good people have been about following the rules. People, by and large, are wearing masks and staying in their cars. I’ve been impressed, because people aren’t always known for following rules.”

“We’ve done a number of those for nonprofits, schools, and corporations. That’s been pretty successful. I’ve been impressed how good people have been about following the rules. People, by and large, are wearing masks and staying in their cars.”

One pressing issue at online and hybrid events, of course, is connectivity and having the redundancy and bandwidth to keep connections from going down. “We’ve had to think and engineer our way into … not necessarily new technology, but using it in new ways. It’s always changing and growing.”

Part of the challenge is communicating issues to attendees, he added. If a hotel ballroom loses power, all 500 people attending in person experience the same thing and know what’s going on. “If 500 people tune into a stream and lose power to the master control room, those 500 people have no idea what happened.”

Jensen agreed that technical concerns were paramount. “It was slightly challenging at the beginning for us tech people,” he said, adding that another challenge has to do with communication — not only with the crew, but with presenters who may be in different locations.

“We’ve done thousands of events over 20 years, and the process is different. We’d have a stage manager go on stage and hand someone a microphone. Now you have to make sure you have plenty of rehearsals and walk them through the process.”

Technology upgrades are a must as well, both for production companies and their clients. “A standard laptop camera and microphone don’t work — certainly it’s not high-enough quality. So we created ‘cases’ and sold a couple dozen to clients, and have some in own inventory. This allows them to have much better image and quality and make their event that much better. We all know a standard iPhone camera or computer camera is not that great.”

Like Zasco, Jx2 found a niche in drive-in events, like graduations. And because the company got into streaming at least 15 years ago, as it went mainstream, it wasn’t too difficult to shift focus to that side of the business this year. “We kind of already had a foot in the door.”

One upside to the current situation, Jensen said, is that it’s forced businesses to think differently about their events.

“It’s a chance for our clients to think outside the box and become OK with not doing things the standard way, the rinse-and-repeat event you’ve done for 10 or 20 years. You get used to doing things a certain way: guests arrive at this time, you do a cocktail hour, there’s a formula to every live event.

“Now, you’re trying to recreate something where the guests’ attention span is definitely lower because it’s virtual, and you’ve got a lower level of interaction from guests,” he went on. “You’ve got to make sure whatever you put on the screen will resonate with guests.”

Working creatively to achieve that goal, he said, can often spark inspiration for future events as well, even the live ones that will return … someday.

 

Optimistic Outlook

Zaskey is looking forward to that day.

“We’re pretty fortunate to be pretty busy, but the profit margins are not the same as they are for live events,” he said. “The entire industry is still struggling greatly.”

Much of the staff laid off in March has come back on a part-time basis as jobs are scheduled. “A lot of what we’re doing, we have to deeply discount, not just to be a good neighbor and help clients so they can pull out of this as well, but to keep our people working.”

One long-term concern is a possible ‘brain drain’ as the pandemic wears on, he added.

“The industry is at risk of losing talent, and that scares us a little bit. As people get desperate and wonder about the future, they might consider career changes. Maybe they’ll come back, but maybe they won’t — maybe someone has always wanted to be a chef, and decides it’s time to go to culinary school. When the world bounces back and live events come back, we need highly skilled people to work on them.”

And events will come back, Jensen said, if only because people desperately want to attend them. “Human nature is interactive; we want to see people, be with people, go to dinner, go on vacation. Most people aren’t homebodies. People over the summer couldn’t wait to go to the beach or go camping. You couldn’t buy a kayak.”

In the same way, “I think live events will come back massively once we get through this pandemic and the comfort level comes back up.”

In fact, Jensen predicts bottlenecks as venues book up quickly once they get the go-ahead from the CDC and state officials. “I think it’s going to be the end of ’21 into ’22 when events pick up fully. We’re a couple years out from full recovery. But people will be eager to plan these things.”

Zaskey agreed. “It’s still very, very tough, and it’s going to be tough for a long time,” he said, but he looks back to 9/11 for a possible parallel. Events suffered mightily after that tragedy as well, but 2002 through 2004 were Zasco’s biggest growth years.

“People wanted to get back to live events. And I think the same thing will happen when the pandemic is over. Getting to that point is the challenge.”

 

Joseph Bednar can be reached at [email protected]

Banking and Financial Services Coronavirus Special Coverage

Lending Support

Chuck Leach, president and CEO of Lee Bank.

Chuck Leach, president and CEO of Lee Bank.

Community banks love commercial lending, Chuck Leach says.

“It’s just good business for us — Main Street lending, that’s where we can have a nice give and take with customers. It’s kind of our wheelhouse.”

That’s all still true, even though 2020 has rocked that wheelhouse in unexpected ways.

“We’re not seeing the same commercial demand,” said Leach, president and CEO of Lee Bank. “It’s either risk aversion or businesses are waiting to see what happens.”

Or, in some cases, they’re extra liquid after taking advantage of the Paycheck Protection Program (PPP) and other stimulus measures, as well as deferring payments on other bank loans, he added. “Put all that together, and they may not have borrowing needs right now, or they’re sitting on their liquidity until they see some clarity with the pandemic or the election or both.”

Clarity has been in short supply since the COVID-19 pandemic forced a widespread economic shutdown at the start of spring that continues to wreak havoc.

Michael Oleksak remembers the first few months of the year, of hearing occasional news about the novel coronavirus back in January, and much more of it as February crept along.

“I’d been asking myself for years, ‘what are we missing? What’s next?’ Because there had to be a ‘next.’ Who would have thought it would be a pandemic?”

“Then, from mid-March into April, everything was a blur. It just spiraled,” said Oleksak, executive vice president, senior lender, and chief credit officer for PeoplesBank, before discussing the PPP surge and other measures that followed (more on that later).

Blurring the picture further was the very uncertainty of what was coming. Having experienced several economic upheavals, from the bank failures of the early ’90s to the bursting of the dot-com bubble in 2000 and 2001, to the housing crisis in 2007 and 2008, he had no idea what the next crisis would be.

“I’d been asking myself for years, ‘what are we missing? What’s next?’ Because there had to be a ‘next.’ Who would have thought it would be a pandemic?

“This will be the fourth economic cycle I’ve been through, and every one has been different,” he added. “And this one is far different than the others. We’re not seeing a lot of new activity. I think everyone is kind of hunkered down, for lack of a better word, in survival mode.”

As Allen Miles, executive vice president at Westfield Bank, put it, “obviously this one was a lot different. You couldn’t see the train wreck coming; that’s the best way to explain it. It just got dropped on us.”

What happened next in commercial lending is an oft-told story recently, but one worth telling again. What will happen next … well, no one really knows. But banks will certainly take lessons from a challenging past seven months as that story takes shape.

 

Lending a Hand

Miles said Westfield Bank started reaching out to loan customers in February when coronavirus became a more widely reported issue. In mid-March, like other banks, it was actively sending employees home. And then the storm hit.

From mid-March into the start of April, “that two weeks was absolutely crazy because you had people looking for loan deferrals, and the bank examiners were very friendly to both the banks and borrowers to try to help these people out,” he recalled. “We were just trying to help our customers. You’re not worried about loan origination; you’re just worried about getting people through the unknown and the craziness.”

Michael Oleksak says new lending activity has been down

Michael Oleksak says new lending activity has been down because many businesses are “in survival mode.”

The first Monday in April, the bank received about 500 PPP applications, and about the same number the next day.

“We needed to get all hands on deck,” Miles told BusinessWest. “We were still waiting on guidance from regulators and the Treasury Department. We had people afraid for their livelihoods, their families, and everything. It was organized chaos.”

The bank got $185 million in PPP loans approved in that first round, what he called a “herculean task.” The second round, several weeks later, was much less chaotic. “That was more for the smaller businesses — a lot more applications, but smaller in dollar size. We were able to keep up with those because we’d been through it, and they weren’t as complicated.”

Oleksak said the PPP was a critical lifeline for a lot of people. “There was kind of a mass panic there wouldn’t be a round two, which put a lot of pressure on the banks and our customers, trying to rush to get them into a program that was not very well-defined from the outset,” he recalled. “Then round two came along, and everyone who needed funds was able to access them, and that made a big difference.”

Leach said the widely reported chaos was quite real, but the larger story was a positive one.

“For now, this has put a lot of capital in the banks and a lot of capital in businesses in our region and beyond. A lot of our customers are in good shape right now.”

“In spite of the controversy, and the people who thought they were making up the rules as they went along, I think the PPP was very functional,” he said. “We’re seeing a lot of customers well-capitalized right now, which is the untold story nationally.

“Maybe that changes and this is just a Band-Aid,” he added, due to the lack of clarity about the next few months, from fears of a second COVID-19 surge to the limbo status of further federal stimulus. “But, for now, this has put a lot of capital in the banks and a lot of capital in businesses in our region and beyond. A lot of our customers are in good shape right now.”

Lee Bank processed 348 PPP loans and has submitted more than 100 forgiveness applications, although some customers are waiting to see if the federal forgiveness guidelines change, specifically whether “they do a sweeping approach where everything under $150,000 is forgiven with a very, very simple forgiveness application.”

Again, borrowers want clarity. Still, Leach came back to the positive impact his bank was able to make with the PPP — and also with loan-payment deferrals for about 240 customers, with about $60 million deferred in total. “In a bank that has $400 million in total assets, you can see that’s a good chunk,” he said, adding that only a fraction of those customers requested a second deferral period.

Oleksak and Miles both reported similar trends, with requests for continued deferrals dropping after the first 90-day period.

“Thirty days before the first deferment was up, we contacted people, and 85% to 90% said, ‘we’re good, we’re not going to be looking for a deferral going forward.’ So that made us feel really comfortable,” Miles said. “With the PPP and the deferrals, it bridged the gap for customers.”

“We’re being very sensitive,” added Kevin O’Connor, Westfield Bank’s executive vice president and chief banking officer. “We’ve been very involved with them, understanding their needs and how the bank can work with them.”

While borrowers in the broad hospitality sector continue to struggle, for obvious reasons, most customers have come through the past seven months well with the help of PPP and loan-payment deferrals, Miles added. “The main ones hurting are the ones being affected by the phases and the rollouts — restaurants, bars. They’ll take a while to get back on their feet.”

 

Starts and Stops

That’s true in the Berkshires as well, Leach said, and restaurants in particular are worried about the onset of cold weather and an inability to seat more customers, due to both the state’s indoor-capacity restrictions and the reluctance among some patrons to eat inside restaurants right now.

But the region’s hospitality businesses have benefited in others ways during the pandemic; in fact, one bed-and-breakfast he spoke with did record business this summer.

Allen Miles says some loan customers are doing well

Allen Miles says some loan customers are doing well, while others, particularly in hospitality, continue to struggle.

“People left urban areas for a safer place, whether for weekends or longer,” he said, adding that some secondary homes became primary homes, while other people bought first homes in an area they felt was safer than, say, New York City. “Interest rates are obviously really low, but there’s also the fear factor of ‘wait, I’ve got to get out of this urban area.’ So there’s been a huge sense of urgency to buy in an area like the Berkshires.”

Unlike some lending institutions, Westfield Bank has seen healthy activity in loan originations recently, Miles said.

“The deferments and PPP money actually made some people stronger because it’s been cash preservation instead of cash burn,” he noted. “Usually for commercial lending, it starts getting busy after Labor Day. We weren’t sure if we were going to see that cycle again, but now it’s quite busy, and people are active. So that’s a really good sign.”

That activity is strong across the board, particularly in commercial real estate, where customers are refinancing for a lower rate or selling, he explained. “It’s a great time to sell — low interest rates, lower cap rates, people are going to pay you more for the property — so you’re seeing a lot of transactions going on right now.”

Commercial and industrial (C&I) loans are healthy as well, he said, adding, of course, that, “with anything related to hospitality or travel, the jury’s still out on that. The longer this [pandemic] hangs over us, the longer the recovery for them.”

At PeoplesBank, Oleksak said, many customers have been accumulating cash and paying down lines of credit, or shopping around to lock in better long-term rates on loans, which is a challenge for banks already facing flattened yield curves. “I think the depth of the crisis is a little bit masked by the amount of stimulus money in the market, from PPP, SBA programs, and deferments.

“The deferments and PPP money actually made some people stronger because it’s been cash preservation instead of cash burn.”

“Some individuals out there are suffering mightily, particularly restaurants and hospitality,” he added. “The other great unknown is, we don’t have a vaccine yet. Are we going to see another spike? People are trying to get back to normal here, but I’m not sure what the new normal is going to look like.”

He pointed to his own institution as an example. Between half and two-thirds of PeoplesBank employees are still working remotely, a trend being reflected across all geographic regions and business sectors.

As a result, “nobody really knows what’s going to happen with the office segment of the market, with so many people working from home. Will they go back at some point? Will companies decide they don’t need so much space, or does social distancing mean you have fewer people but still need more space? It’s a total unknown for us.”

It’s unfortunate that some industries, like restaurants, will likely see a slower return to health, O’Connor said, “but it’s good to see customer confidence in some areas coming back, even a little bit sooner than we would have expected.”

Miles agreed. “We’re very happy with what we’re seeing right now. It’s not behind us, but it’s not as bad as people anticipated. If activity is picking up and people are borrowing, they’re confident, which is good.”

 

Joseph Bednar can be reached at [email protected]

Coronavirus Insurance Special Coverage

At a Premium

The story is a familiar one by now: hospitals across the U.S., hammered by COVID-19, began directing resources toward fighting the pandemic last spring and curtailed elective and non-emergency procedures. Meanwhile, patients, even when sick, stayed away from medical practices out of fear of infection.

As a result, health insurers continued to reap premiums while paying out millions of dollars less in medical claims. Some of the largest companies reported second-quarter earnings about double what they were a year ago. Anthem’s net income soared to $2.3 billion for the second quarter, up from $1.1 billion in 2019, while UnitedHealth reported net income of $6.7 billion, compared to $3.4 billion last year. Humana’s second-quarter net income rose from $940 million in 2019 to $1.8 billion in 2020.

But the issue is a complex one, especially in Massachusetts, where laws governing insurance are different, said Keith Ledoux, vice president of Commercial Line of Business, Sales, Marketing, and Business Development for Health New England, a 166,000-member health plan based in Springfield.

For example, HNE did see lower utilization for medical services among its members in the early months of the pandemic; however, at the same time, it saw an increase in prescription-drug fills as members made sure they had their medications during stay-at-home orders.

“On the pharmaceutical side, we saw a small spike in claims and overall costs starting at the end of March and the beginning of April because we had relaxed our rules on allowing folks to fill prescriptions early, or to get a greater supply,” Ledoux told BusinessWest.

Meanwhile, “after April, on the medical side, we saw a significant reduction in claims, but starting in probably June, we started to see that pick back up — almost back to what we would consider to be somewhat normal.”

At the same time, the pandemic brought about a significant increase in telehealth utilization; through April, HNE had processed 114,000 telehealth visits for its members versus 900 in all of 2019, accounting for $12 million in costs for Health New England.

“One reason that’s so costly for us is that we’re mandated by the government to pay the same rate for telehealth as we would for an in-person visit, and typically telehealth is cheaper than in person,” Ledoux said, adding that future state negotiations will likely alter that formula as telemedicine continues to gain traction in healthcare.

“The silver lining is not the cost, but the behavior shift of so many members embracing the idea of telemedicine, which does broaden your ability to access non-invasive care. There’s definitely an opening for systems to adopt a new approach and potentially increase their revenue stream using telemedicine.”

Massachusetts-based Tufts Health Plan reported that COVID-19 treatment costs were one factor in actually recording a drop in net income between the first six months of 2019 to and the six months of June 2020.

Keith Ledoux

Keith Ledoux

“After April, on the medical side, we saw a significant reduction in claims, but starting in probably June, we started to see that pick back up — almost back to what we would consider to be somewhat normal.”

“Tufts Health Plan proudly serves all segments of the market, regardless of a person’s age or life circumstance,” Chief Financial Officer Umesh Kurpad noted in a statement. “This diversity in our business translates into different financial pressures, such as significantly higher COVID-19 infection rates and treatment costs for our members, particularly those who rely on both Medicare and Medicaid.

“Year-to-date, our earnings were challenging, with the increased costs of COVID-19-related expenses across virtually all of our businesses,” he went on, projecting COVID-19 expenses to reach $220 million for the full year. “The pandemic cost tail is anticipated to be long with the lingering impact of COVID-19 survivors and increased morbidity from deferred care.”

In short, there’s no one trend common among health insurers in a year where they, like all industries, have learned to expect the unexpected.

Appointment Viewing

Another Massachusetts-based insurer, Harvard Pilgrim Health Care, reported little change in second-quarter net income from 2019 ($36.2 million) to 2020 ($40.9 million). It also encouraged members not to avoid medical services they need.

“Now more than ever, our focus remains on the health and well-being of our members and the communities we serve,” President and CEO Michael Carson said. “Many people have deferred care over the past several months, and it is incredibly important that they not neglect their health. Healthcare providers have implemented stringent safety precautions, and we encourage our members to seek routine and preventive care, including checkups, health screenings, and vaccinations.”

Ledoux told BusinessWest that HNE typically doesn’t know the performance of a year until probably three or four months after the year has closed.

In its planning for 2021, he explained, the company must consider uncertainties with expenses, which include utilization continuing to pre-COVID levels; increased use of high-cost technology; and costs of new pharmaceuticals, vaccines and testing, as well as increased costs for certain behavioral healthcare for children and adolescents.

Consumers are protected to an extent by state and federal laws that require health plans to rebate customers annually if the percent of premiums spent on medical expenses falls below a certain threshold.

Under the Affordable Care Act, insurers are required to use a fixed percentage of the money they take in from premiums for their customers’ medical expenses — at least 80 cents of every dollar they collect in premiums from small businesses and individuals, and 85 cents per dollar for large employers. The remaining 15% to 20% percent is what they are allowed under the ACA to spend on administrative costs like overhead and marketing, and to keep as profit. Excess revenues are to be returned to consumers in the form of rebates.

“If we perform even 0.1% better than 88%, we have to rebate that excess margin back to the market. In a regular year, our target margin is around 1.9%, which we hardly ever achieve. All these variables make it difficult to make a profit.”

Under Massachusetts’ health-insurance law, that number rises to 88 cents on the dollar. “If we perform even 0.1% better than 88%, we have to rebate that excess margin back to the market,” Ledoux said, adding that, “in a regular year, our target margin is around 1.9%, which we hardly ever achieve. All these variables make it difficult to make a profit.”

Some of those variables emerged this year in the form of concessions to the pandemic and the stress it has placed on families, he noted. “We relaxed a lot of rules on how we collect premiums. Normally it’s a 30-day grace period, and we expanded that another 30 days.” HNE also allowed furloughed employees to stay on their companies’ health plans.

“We continue to evaluate our position in the market,” he added. “There are already protections in place, profits above what would be considered reasonable, and a mandate to rebate that back to the market. We already know it self-corrects on its own.”

Meredith Wise, president of the Employers Assoc. of the NorthEast, told BusinessWest that health-insurance premiums haven’t been a big topic among EANE’s members. “We’ve heard from some employers who are getting refunds, but it hasn’t been a major thing that anyone is focusing on at the moment.”

Nationally, insurers are spending a far lower portion of premium revenue on their customers’ healthcare costs. For example, CVS said its medical-benefits ratio was 70% for the second quarter, compared to 84% over the same period in 2019.

According to a report in the New York Times, the ACA gives companies a three-year window to calculate how much to return, so members probably shouldn’t expect relief anytime soon, especially because it’s hard to tell what the rest of the year will bring, with COVID-19 numbers still fluctuating dramatically from state to state, as well as the impact of potentially expensive new vaccines or treatments around the corner. At the same time, many people who postponed getting medical attention could surge back into doctors’ offices and submit more bills for coverage.

“The second half of the year could see a lot more care, and higher costs, than the first half of 2020,” according to a statement by America’s Health Insurance Plans (AHIP). “However, if these costs never materialize and remain below certain levels, American consumers, businesses, and taxpayers are protected by provisions in federal and state laws that require health-insurance providers to deliver premium rebates and put money back into their pockets.”

Community Focus

In addition to changes in patient volume and the bottom line, the pandemic shifted the priorities of Health New England in other ways, Ledoux said.

For instance, it contributed $300,000 in grants for COVID-19 relief efforts throughout Western Mass. to help residents with access to food, mental healthcare, child care, housing, and basic needs.

The company has also made benefit adjustments that make it easier for members to get the care they need, such as eliminating out-of-pocket costs for all telehealth services and for COVID-19 diagnostic testing ordered by a medical professional, no prior authorizations for members receiving medical care for COVID-19, and flexibility with payment plans and adjusted underwriting guidelines to ease the burden for employer-group customers and members.

Meanwhile, as it approaches Medicare’s annual enrollment season, Health New England is holding online Zoom sessions and drive-up events, and has added staff to its call center, to help educate people about their Medicare options.

“The second half of the year could see a lot more care, and higher costs, than the first half of 2020.”

Tufts has implemented a number of changes as well, including compensating providers 100% of an in-office rate for telehealth, working with providers on a case-by-case basis to address their concerns regarding payment stability, extending premium payment periods for employers who need more time to make payments, and contributing $2 million to support those affected by the coronavirus outbreak in Massachusetts, Rhode Island, New Hampshire, and Connecticut.

Certainly, reports of soaring profits may persuade some lawmakers to revive proposals to cap insurers’ profits even more, but insurers say they are using their financial strength to help customers, hospitals, and doctors. In the New York Times report, AHIP also cited trends like waiving co-payments for COVID testing and treatment and paying for telemedicine visits, some of which the government has mandated be covered.

“From the very beginning,” AHIP CEO Matt Eyles said, “health-insurance providers have focused on being part of the solution.”

Joseph Bednar can be reached at [email protected]

Commercial Real Estate Coronavirus Special Coverage

A Matter of Speculation

Ned Barowsky

Ned Barowsky is transforming 14,000 square feet of what was retail space into Venture X, a co-working concept, one of many signs of change within the region’s commercial real-estate market.

It was time to face facts, Ned Barowsky recalled.

For six months, two brokers assigned by a large, national real-estate firm had been trying to fill the vacancies left at Barowsky’s property at 98 Lower Westfield Road by the departure of Pier One Imports and Kaoud Oriental Rugs. And they had gotten … nowhere.

“I met with them on the phone weekly, and they sent me a sheet of everyone they talked to and e-mailed, and all the responses they got,” he said. “For six months prior to COVID, not one bite. And they worked it. I felt bad for them; I wanted to pay them, but they didn’t get me anybody.”

Faced with this handwriting on the wall and an uncertain future for the Holyoke property he has owned for nearly 35 years, Barowsky is doing what so many are doing in the midst of COVID-19, and in general. He’s pivoting — big time.

Indeed, he intends to remake those vacated storefronts, and some additional space at the complex, into a franchise for the emerging co-work concept known as Venture X, which bills itself as “the future of workspace” (more on that later).

This intriguing pivot is just one indication that the local commercial real-estate market is in a state of flux, if you will, with perhaps profound changes to come as the pandemic continues and its impact on this sector grows.

Indeed, there is already significant movement in the market when it comes to additional vacancies and properties becoming available. Meanwhile, there is widespread speculation that the office market in particular may see considerable disruption as businesses with some or most of their employees working remotely consider making such arrangements permanent.

“A remote work hub is basically converging living space with working space; you’re allowing people to get out of their house and into a work place that’s safe — and in close proximity to where they live.”

And even if they don’t swing that far when it comes to working arrangements, there are questions about how much of their present space they’ll retain when their lease is up.

“We have lost a few tenants, mostly due to non-renewals as companies look for ways to be more efficient and perhaps consolidate if they had multiple locations,” said Evan Plotkin, president of NAI Plotkin and co-owner of 1350 Main St. in Springfield, noting that Bay Path University, which occupies roughly 12,000 square feet, is one of these tenants.

But as some are downsizing or not renewing, others are actually taking more space to accommodate pandemic-era guidelines on social distancing and keep employees safe, said Plotkin, noting that he’s already seen such upsizing from a few tenants and expects more in the months to come.

In the meantime, new leases are being signed, and properties are being acquired, said Demetrios Panteleakis, a principal with MacMillan Group LLC, which has authored what could certainly be called a stunning turnaround at Tower Square in downtown Springfield.

Over the past 24 months or so, Panteleakis said, MacMillan has successfully backfilled roughly 80% of the 150,000 square feet of office space in the complex that MassMutual vacated, with about a third of that coming in just the past few months.

The latest additions in the office tower include Wellfleet and Farm Credit Financial Partners, which moved into 37,500 square feet on the sixth floor, but also a few law firms and a civil-engineering firm. Meanwhile, on the retail side, the Greater Springfield YMCA moved several of its operations last winter, White Lion Brewery is completing work on its brewery and eatery in the former Spaghetti Freddy’s space, and a nail salon has moved in. And all this is on top of a massive renovation of the hotel on the property into a new Marriott.

“Tower Square is absolutely on fire,” he said, adding that he believes the success at that address has been a function of providing an attractive product in a good location, in this case an urban area in the midst of what has been called a renaissance.

Demetrios Panteleakis says activity has been strong at Tower Square

Demetrios Panteleakis says activity has been strong at Tower Square in recent months, with new leases signed for both retail and office space.

Mitch Bolotin, a principal with Springfield-based Colebrook Realty Services, agreed that there has been activity within the market despite the pandemic, noting that his firm has completed a number of transactions, including the sale of the property at 95 Elm St. in West Springfield formerly occupied by United Bank, the Newman Center on the UMass Amherst campus, and lease of the former Chandler’s restaurant space at the Yankee Candle complex in South Deerfield, among others.

The $64,000 question is … what happens now?

No one really knows the answer. Many brokers are encouraged by numerous stories in recent weeks about both productivity being down as a result of remote working and pent-up desire to return to the office. But these sentiments are juxtaposed against others indicating that remote work has been a success and, as a result, less office space will be leased in the future.

Speaking for others, Panteleakis said there will likely be a lull or pause in the action until perhaps the end of the first quarter of next year as business owners sort some things out.

Work in Progress

Plotkin calls it a “remote work hub.”

That’s a term he borrowed from a request for proposals he’s likely to respond to, and it describes … well, a place where people can both live and work. But not like the current work-from-home environment many are now experiencing.

“A remote work hub is basically converging living space with working space; you’re allowing people to get out of their house and into a work place that’s safe — and in close proximity to where they live,” said Plotkin, adding quickly that he’s thinking hard about whether 1350 Main St. can be shaped into one of these remote work hubs. He thinks it can.

“I have a design here that works great,” he told BusinessWest. “We have some empty floors, and if we created maybe 20 units per floor and used the three floors that are empty, that would be 60 market-rate housing units. And if you had another floor that was a COVID-19 pandemic remote work space, which has yet to be designed, I think you’d have something very attractive.

“The idea is to make people feel that they can go someplace to work and not be in their kitchen, not be in their living room, and actually have some socialization and see other people,” he went on, adding that such a facility would help attract people of all ages, but especially young people, to downtown Springfield.

The fact that Plotkin is thinking about such a dramatic pivot provides more evidence that the commercial real-estate market is changing and there are certainly question marks about how — and how profoundly — the landscape may change.

The remote-work phenomenon, if it can be called that, is certainly at the heart of much of this speculation. Indeed, as more workers toil from home for longer periods — some of the massive tech companies have told employees they won’t be coming back for a year, at least — questions are raised about whether such arrangements will become permanent, and what this means for major urban centers and individual office facilities.

Barowsky, for one, believes that companies will be less likely to want to tie themselves down with long-term leases for large amounts of space. And that’s one of the reasons why he’s moving forward with Venture X.

A Holyoke native who has seen a number of economic cycles and an ongoing evolution of the area’s retail scene, Barowsky believes this co-work space is certainly the right concept at the right time — and especially the right place.

“I don’t think you get this energy that you have when people are working together in one office, and you don’t see the productivity.”

Indeed, the site, just a few hundred yards from the Holyoke Mall, is right off I-91 exit 15 and only minutes off exit 4 of the Mass Pike.

“This is literally the crossroads of New England,” said Barowsky, adding that this address makes the Venture X facility attractive for businesses across a number of sectors.

Add all these factors up, and Barowsky doesn’t see this dramatic pivot — away from retail and into co-working space — as much of a gamble. And if it is a gamble, it’s one he believes will pay off eventually, perhaps sooner than later.

Indeed, he said the current timeline doesn’t have him opening the doors for another six months, but he’s already received a number of inquiries about his concept.

Questions and Answers

While Barowsky doesn’t have any doubts about his new development, there is a growing amount of uncertainty when it comes to the larger commercial real-estate market.

And it crosses many of the sectors within that realm, including retail — which was already under considerable stress before COVID-19 due to online buying and now is under even more — and especially the office market because of questions about the future of work.

“At this point, I think the jury is still out — the verdict is not in yet,” Plotkin said. “There’s been an abrupt change in how we work, and it has required us to work remotely. It’s been a complete lifestyle change, and it’s created a fair amount of fear. And those converging factors may prevail over a long period of time; we just don’t know.”

Panteleakis agreed to some extent, but said he concurs with JPMorgan Chase Chairman and CEO Jamie Dimon, who recently told American Banker that he sees economic and social damage from a longer stretch of working from home.

“Between 2002 and 2005, there was a big movement happening — commercial real estate had become so expensive that everyone was trying remote working,” he recalled. “Jamie Dimon is saying the same thing that everyone was saying back then — that they see a decrease in productivity. So I think real estate is coming back; I don’t think you get this energy that you have when people are working together in one office, and you don’t see the productivity.”

Plotkin concurred. “Today, people can work from anywhere, and it’s appealing to people to work from anywhere. But the reality is that working from home is isolating, and I don’t think that’s a long-term solution.”

Added Bolotin, “there is a lot of speculation on both sides of that fence. I believe that the office market will still have a future — there will still be demand. Working from home is fine on a limited basis, but people will eventually migrate back to an office setting.

“Needs might change,” he went on. “They may need to consolidate, or they may wish to add more space for social-distancing purposes. But what the net effect of this will be … time will tell.”

Returning to the present, those we spoke with said there are certainly some deals getting done, and the market remains active. Panteleakis cited not only Tower Square, but also neighboring 1550 Main St., which he also handles, and which is fully occupied.

Bolotin, citing those recent transactions in West Springfield, Amherst, South Deerfield, and other communities his firm was involved with, said they provide evidence of a resilient economy and an equally resilient commercial real-estate market, one that has seen a number of downturns — and recoveries.

“We’re very active, we’re busy, there are transactions happening,” he said of his firm but also the market overall. “Over the past few months, we’ve had deals close across a number of categories — office, retail, industrial, land, investments. We’ve had activity in all segments.”

Some of these transactions bode well for the region and some of its individual communities, he noted, such as the sale of 95 Elm St. in West Springfield. Considered a key to development of the downtown area, the property is being targeted for a mix of office and retail, said Bolotin, and his firm is currently negotiating several potential leases in that building.

Meanwhile, other deals have been closed involving retail (two Family Dollar stores), industrial (more than 500,000 square feet in total), and even a few church properties.

“It is certainly a challenging time, and there are people who have been negatively impacted,” he stressed. “But there is still activity within the marketplace.”

Bottom Line

As for the immediate future … Panteleakis said a pause, or lull, is common just before presidential elections. And this year, COVID-19 has given business owners and managers more reason to be cautious.

“People are in a wait-and-see mode,” he explained. “Most of the executives that I’ve spoken with are waiting to see what happens in the first quarter of 2021. So I think the jury will be out until that first quarter of next year.”

After that … no one really knows when the jury will actually be back and what the verdict will be.

But some are already anticipating long-term changes to the landscape. That’s why Venture X is taking shape in Holyoke and why Evan Plotkin is drafting plans for a remote work hub.

Plenty of questions remain about the future, and the answers won’t come easily.

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

Coronavirus Features Special Coverage

Plane Speaking

Travelers at Bradley

Travelers at Bradley (and there are fewer of them) will find a number of new protocols, from mandatory face coverings to more frequent cleaning and sanitizing.

Bradley International Airport has a contract with a medical laboratory willing to conduct COVID-19 testing for arriving passengers.

Kevin Dillon, executive director of the Connecticut Airport Authority (CAA), which manages the airport in Windsor Locks, Conn., thinks that would be an ideal way for healthy travelers to avoid a mandatory 14-day quarantine instituted by Gov. Ned Lamont in July.

But state leaders turned that option down.

“We have a lab that’s willing to start testing here, yet we can’t convince the Department of Public Health to allow that to occur. It makes no sense,” Dillon said. “Because what’s impacting us now is the travel advisory that’s been put in place here in Connecticut.”

According to the policy, both tourists visiting from other states and Connecticut residents returning from vacations in COVID-infested areas are required to fill out a travel advisory form and indicate where they will self-quarantine. Failure to do so incurs a $1,000 fine.

“Unfortunately, the airlines are reacting to the travel advisory by pulling flights out of the airport,” Dillon explained. “As you can imagine, it’s very, very difficult for someone to take a week vacation and then, when they come back, have to take a two-week quarantine. The same goes for business travel — people aren’t going away for two days when they have to quarantine for 14. That’s had a pretty chilling effect on our level of recovery.”

It’s a recovery — if one can call it that — from the most dramatic loss of business airports across the country have ever experienced, the post-9/11 period included. In April, passenger volume at Bradley was down 98% compared to the same period last year. The airport has recovered some of its volume, but a typical day is still some 70% to 75% below 2019 numbers. And the state of Connecticut is doing the airport no favors with one of the most rigid travelers’ advisories in the nation.

Kevin Dillon

Kevin Dillon

“Airports are competing for some very limited airline assets, aircraft and flights, so we want to present a market that’s viable. This travel advisory really starts to skew how some carriers look at Connecticut and Bradley Airport and this region.”

“I’m not questioning the medical necessity of a travel advisory — I’m not qualified to question that, and I take folks at their word that it’s is a necessary thing,” Dillon told BusinessWest. “What we have asked for here is a testing option. If you get a negative COVID test, you should be able to avoid a 14-day quarantine period. Massachusetts is doing that.”

He has other questions — including why it’s OK to cross the border for a funeral, but not a business meeting — and they all come, he said, from a place of common sense. “We’re not questioning the travel advisory, but I do think testing here at Bradley would make all the sense in the world.”

If the impact of discouraging interstate travel was a short-term thing, it would be less frustrating, but Dillon is looking far beyond 2020, when airlines will emerge from the pandemic as much smaller companies, with fewer planes to spread around the nation’s airports, and some tough decisions to make about where to put them.

“They’re really having a struggle,” he said, with some airlines saying they don’t expect to return to normal operations until 2023 or 2024. “There are going to be winners and losers coming out of this.”

This is true, he said, not only of airlines, but of airports.

“Airports are competing for some very limited airline assets, aircraft and flights, so we want to present a market that’s viable,” Dillon explained. “This travel advisory really starts to skew how some carriers look at Connecticut and Bradley Airport and this region. It’s a concern of ours not only for today but as we look to the future — what damage we’re doing to our relationships to airlines as well as their view of this market.”

Physical distancing

Physical distancing is easier when terminals are less crowded, as they are now.

For this issue’s focus on transportation, BusinessWest spoke with Dillon about how Bradley is navigating an unprecedented business challenge, and why it’s important to keep investing in the future, because the future is where this story really gets interesting.

Shifting on the Fly

Even before COVID-19 was a thing, Dillon often spoke about how Bradley was constantly competing on two levels: with Logan and the New York airports for passengers, and with every airport in the country for those precious aircraft assets. On thar front, Connecticut’s mandatory quarantine isn’t helping.

“Airlines have to be in locations like Boston and New York simply because of the population and business volume. But airlines have alternatives in terms of not having to serve Bradley and still serving a good portion of this market area,” he explained. “I don’t think it would serve the area really well without us, but an airline trying to skinny down as a result of cost-cutting measures could very well look at it that way.”

The more pressing issue in 2020 has been plummeting demand, of course. “If we don’t have passengers coming through the airport, airlines cut back, we don’t get airline fees, and no one’s here utilizing concessions, parking, renting cars, all the businesses here. When your business is off 75% to 80%, you have a corresponding drop in revenue. It’s a difficult balancing act.”

Dillon said Bradley was fortunate to receive some financial assistance from the CARES Act, which allocated $10 billion to airports across the country. Based on the allocation formula, Bradley received $28 million, which sounds like a lot of money, he went on, but to put it in perspective, that covers about three months of operating expenses and debt service. And the pandemic-related travel slowdown is now well into its sixth month.

“We are fortunate that, as an airport authority, we did create what I consider some healthy reserves, and we will rely on those reserves to some extent, but it wouldn’t be prudent to exhaust our reserves,” he said, noting that they impact bond ratings, among other things.

Bradley did institute a hiring freeze, not replacing most employees who chose to retire this year, and has cut department budgets by 10% to 20%. The CAA is also looking at further measures, including a voluntary severance program.

“It is a goal of ours to try to prevent involuntary severances,” Dillon said. “We don’t want to get to a place where we’re talking about layoffs. For now, that’s off the table. We tried to make a commitment to the employee base — first and foremost, to protect their health, and second, to protect their paycheck. As you can imagine, it’s a challenge.”

About $20 million in capital projects are on hold as well, but some are moving on, including an airport-wide restroom-renovation project that should be complete by October, and features a largely touchless experience with sinks, soap dispensers, hand dryers, and more. These features were planned well in advance of the pandemic, but Dillon said travelers will appreciate them more now.

“People want a safe, healthy, clean environment, and we try to deliver that the best we can,” he noted. “Folks think differently about hygiene in public places now; they have different expectations.”

Other protocols in place at Bradley include the expected: mandatory face coverings, more frequent cleaning and sanitization efforts at high-touchpoint areas, plenty of hand-sanitizer stations, signage detailing physical distancing rules, and plexiglass shields in high-passenger-interaction areas.

Some airlines have committed to limited capacity on planes as well, Dillon said, citing Southwest and Delta as two examples. And the airport is developing touchless kiosks where travelers don’t have to interact with an agent or touch the screen to activate the ticketing process.

Bradley’s restrooms

A major renovation of Bradley’s restrooms, including many touchless features to discourage the spread of germs, began well before the pandemic.

“The key for us is to keep differentiating ourselves from our larger competitors,” he told BusinessWest. “We want people to understand that Bradley is going above and beyond in terms of sanitizing and cleaning the facilities. And Bradley might represent a better option because it’s less congested. We’re going to keep highlighting to the traveling public why Bradley is a better alternative.”

View from the Ground

Again, however, all these efforts are blunted by the fact that considerably fewer people are traveling, and Connecticut is making it difficult to do so.

Airlines are struggling too, Dillon said, sending 135-passenger planes into the sky with only 25. And, like airports, they’re all having internal discussions about the future. Bradley’s five-year contract with carriers expired in June, and with no airlines in a position to sign another five-year deal, they opted for one-year extensions.

But even had longer-term contracts been in place, he explained, “I think a lot of people don’t understand how an airline agreement works. It doesn’t necessarily guarantee you full revenue coming in, because airlines pay revenue in large measure based on landing fees. Airlines can have a presence and pay rent for space, but they’re not required to operate a certain number of flights. If you have carriers cut operations in half, the landing fees we get are then cut in half from that carrier.”

As a difficult, uncertain year continues to unspool, there are a few bright spots, especially progress on a $210 million ground transportation center — expected to be fully operational in late 2021 — that will house car-rental services, expand public parking, and incorporate public-transit connections.

“All that money had been bonded prior to the pandemic, so we’re committed to the project,” Dillon said. “It will really transform the look of the airport and our operations. People who haven’t been to the airport recently will be surprised by the magnitude of the project and how it’s transforming the space out there.”

In addition, cargo business at Bradley has remained consistently strong. “I believe one factor is that people are staying home and doing a lot of online ordering, so we’re seeing small-package delivery — UPS, Fedex, and Amazon — all increase at the airport,” he noted. “Unfortunately, the revenue profile of cargo is much different than passenger traffic, as the bulk of the revenue at any airport comes from the passenger side of the house. But I appreciate that cargo is doing well right now.”

After all, in a year of startling setbacks, any good news is welcome. But what airports need now is clarity — and for people to get back on planes.

“It’s going to be a challenge,” he said. “I’m convinced that, by working smart and having employees work smart, we’ll be able to get through this. But it will be a balancing act for a while.”

Joseph Bednar can be reached at [email protected]

Banking and Financial Services Coronavirus Special Coverage

Uncharted Waters

Michael Tucker

Michael Tucker, president of Greenfield Cooperative Bank.

It’s safe to say 2020 has been an unpredictable year, testing the ability of all businesses to be nimble. Matt Sosik thinks banks are passing that test.

“Community banks may seem like they’re a staid industry, but we’re actually very accustomed to change, and sometimes a fast pace to that change,” said Sosik, president of bankESB. “So we’re used to it. It’s not always visible from the outside, but culturally, we were very well-positioned to deal with the pandemic.

“The unique thing was that it just seemed to happen so fast. It was zero to 60, and you can’t always move at that pace,” he added, noting that bankESB is part of a family of three different banks with almost 500 employees. “But we pivoted as fast as we could.”

Part of that was recognizing that many customers were suddenly in turbid financial waters, and needed help. So, early in the pandemic, all banks were doing what they could to help them, whether that meant deferring mortgage loans for a few months or guiding businesses through the hastily assembled Paycheck Protection Program, or PPP.

“We had a customer-centric focus, which meant helping people navigate payment-related financial issues — at least the financial issues in their lives that could impact their ability to pay us. We did modifications for a lot of folks; we could foresee this was going to be a problematic situation for them. We got out front of it early and tried to alleviate that one piece of stress at a time when so many aspects of life were stressful. We did millions-of-dollars-worth of modifications for customers in the Pioneer Valley.”

Business customers, especially ones forced by a state mandate to shut their doors, were facing similarly dire issues, Sosik said. “We were also doing PPP by the truckload. It was uniquely challenging for us because it all happened at once.”

Such efforts have impacted banks’ bottom line, said Michael Tucker, president of Greenfield Cooperative Bank (GCB), noting that about 15% of mortgage and commercial loan customers took advantage of deferral programs, resulting in an impact of $900,000 from an accounting perspective.

“Everyone else seemed to be in good shape — but that doesn’t mean it’s going to stay that way,” he told BusinessWest. “I don’t see this totally ending until there’s some sort of treatment or vaccine that’s really effective. That being said, things are slowly reopening, and Massachusetts has done a pretty good job keeping infections down.”

And community banks were an important part of that, he said, noting that those loan deferrals, plus costs related to the shutdown and investments in safety protocols in order to reopen, have contributed to GCB being about $1.5 million behind where it would normally be.

“Community banks may seem like they’re a staid industry, but we’re actually very accustomed to change, and sometimes a fast pace to that change. So we’re used to it.”

“It’s going to be a profitable year, but a lot leaner. It’s going to be a challenge,” Tucker went on. “What worries me is what hasn’t risen to the top. We did the payment holiday, but now that the unemployment supplement is gone, and companies rightsize — a lot of them were paying people but couldn’t keep it up forever — I think, until we have a vaccine, we’re looking at a very difficult 2020 and 2021. We’ll be solid; we’ve put a lot of reserves aside, but it’s going to be a challenge.”

Loan Stars

There are some positive signs in the economy, said Jeff Sullivan, president of New Valley Bank, which launched in Springfield last year. He participates in a group of bank CEOs, and on their last group call a couple weeks ago, most said they were pleasantly surprised that, at least on the commercial-loan side, customers who had deferred loan payments had largely returned to their normal payment schedule.

He noted that bank stocks have been “beat up,” as the analyst community didn’t like the idea of deferring principal and interest. “But the overall, totally unscientific trend I’ve seen is that people are pleasantly surprised with how businesses are coming back.

“From our standpoint, we see a lot of growth; businesses are making plans again,” he went on, conceding that New Valley doesn’t yet have a huge portfolio to manage.

Meanwhile, the housing market and stock market are doing better than anyone expected three months ago, he noted, which contributes to an overall mix message when GDP was down 30% in the second quarter and unemployment rose to 16%. “These are troubling numbers, and from a community-bank perspective, we hope it doesn’t turn into a haves-and-have-nots recovery, where the rich get richer and more people get left behind.”

Tucker said demand for loan deferrals has been way down, and banks are now pivoting to help businesses with the forgiveness-application phase of the PPP.

“We did about $18 million worth of PPP, which for us was a lot because most of our loans were under $250,000,” he said, noting that GSB handled about 280 such loans. “It was about a year’s worth of work in a month. Like a lot of banks, our staff was working nights and weekends.”

Sosik added that the waters surrounding the PPP forgiveness phase are still a but murkey and could use some clarity from Congress so the forgiveness path can be clearer. “If people are unclear about forgiveness, they don’t want to spend the money, so it doesn’t get out into the economy.”

At the same time, he added, banks are also being cautious when it comes to growth plans.

“It’s a time to be careful, but at the same time it’s been a very successful year,” he told BusinessWest. “We’ve grown a lot this year, but we’re obviously looking forward, expecting continued economic challenges, and our job is to be here for many years. There are times to push hard and run fast, and times to slow that down and be cautious.”

Still, banking leaders are pleased to have made the investments they did in online and remote banking models, Tucker noted, while holding up his smartphone. “Our fastest-growing branch is this. That’s a reality.”

“Banks caused the 2008 recession. Banks were weakened and in a penalty box and reviled by the mainstream for several years afterward. The big difference now is, this recession was not caused by banks.”

But while the number of GCB customers using remote banking is 25% higher than before COVID-19, branches still serve a critical purpose, he added. “We’ve seen a lot of people realize we are invaluable to them. When they had problems with their mortgage, they can deal with one person and not get shuffled through a lot of bureaucracy. That’s a plus.”

While branches are still necessary, he went on, they’re different than they used to be; the recently opened South Hadley branch is 1,800 square feet, less than half the space the bank used to set aside for new branches. But he doesn’t foresee any closures, aside from two Amherst branches, about a mile apart, that recently consolidated into one.

“Some banks are using this time as a trigger to say, ‘OK, we’re going to close these branches,’” Tucker added. “We’ve chosen not to do that because there’s enough disruption for customers as it is.”

Sosik noted that bankESB has invested a lot of money in the remote infrastructure and platform. “The technology works seamlessly, and the adoption was good. We were looking for a catalyst we could use to push it and have customers really start enjoying the technological advances. We didn’t expect it to come from a pandemic; we didn’t want it to come from a pandemic. But the pandemic absolutely pushed people to use it.”

That said, “we totally believe in the branch part of the overall delivery system, and we’re still investing in branches,” including one recently opened in Amherst. “But they’re much different than the ones we built a decade ago, or even five years ago. There’s still a need for a branch; customers still want that. Even if they don’t need to be there, they still like that someone they know and trust can work with them when they need it.”

Here for the Long Haul

Whatever the model, the presidents BusinessWest spoke with all believe in the work community banks have done and continue to do during a very difficult year for so many.

“We believe in it,” Sosik said. “Everyone who works for a community bank does it because we love that part of it. If you look at any successful New England town, you’re going to find a locally managed, if not locally owned, community-type bank at its economic center”

While banks still grapple with the impact of not only loan deferrals but ultra-low interest rates, they’re still in strong shape, he added.

Sullivan agreed. “Banks caused the 2008 recession. Banks were weakened and in a penalty box and reviled by the mainstream for several years afterward. The big difference now is, this recession was not caused by banks. Banks are healthy and have lots of capital. And hopefully we can turn the page soon and get back to normal lending.”

Tucker doesn’t know what shape the recovery will take — a U, a V, or the one he feels is most likely, resembling the Nike ‘swoosh’ logo, with a long, gradual ascent to normalcy.

“But we’ll do fine, and we are doing fine,” he said. “There’s just a lot of pressure on the margin with rates as low as they are and all the unknown with COVID.

“I’m very optimistic, though,” he added. “Businesses are doing OK. Yeah, a lot of them are struggling, but we see a lot of small businesses trying their damnedest. And we’re trying to support those businesses. We’re here, and we’re going to be here.”

Joseph Bednar can be reached at [email protected]

Banking and Financial Services Coronavirus

Volume Business

By Mark Morris

When COVID-19 made its arrival in Western Mass., it was mid-March, just weeks before the start of the traditional home-selling season. Area mortgage professionals didn’t know what to expect when the pandemic hit, but they certainly weren’t projecting a solid year.

Soon, though, they had to adjust those expectations and projections.

Indeed, a combination of factors, from historically low interest rates to high demand and low inventories, have made this a much busier, much better year than most residential lenders and home sellers could have hoped for back in the dark days of March.

Indeed, instead of completely canceling the spring home-buying market, the pandemic merely postponed it, said James Sherbo, senior vice president of Consumer Lending with Holyoke-based PeoplesBank.

“We’ve been very busy because the activity we would have normally seen in April or May, we saw in June, July, and August,” he told BusinessWest.

Jeffrey Smith, vice president and chief Lending officer with Freedom Credit Union, concurred, noting that any debilitating effects on the housing market from the pandemic have been more than offset by lower interest rates. The rates were already fairly low — in the 3.25% to 3.5% range — before the pandemic, he said, but now consumers can now get a 30-year fixed-rate mortgage for well under 3%.

James Sherbo

James Sherbo

“We’ve been very busy because the activity we would have normally seen in April or May, we saw in June, July, and August.”

“This is probably the best real-estate market I’ve seen in years,” Smith said. “When the pandemic first hit, I thought it was going to be just the opposite.”

Meanwhile, many mortgage holders are taking advantage of these lower rates to refinance, and this high volume of refis, as they’re called, is keeping most all lending institutions busy.

“It’s crazy … we’ve seen an 80% volume increase in our overall business compared to last year,” Smith noted. “And we certainly did not expect that.”

Tami Gunsch, senior executive vice president and director of Relationship Banking at Berkshire Bank, agreed. She said the bank is pleased with the Mortgage Division’s performance, “especially during these unprecedented times of COVID-19.”

For this issue and its focus on banking and financial services, BusinessWest takes an in-depth look at the housing market and the various, and powerful, forces that are driving it.

Rooms for Improvement

Flashing back to mid-March, Sherbo said his department was mostly focused on where (and how) team members would work, and keeping employees and customers safe.

“We just tried to prepare as best as we could to keep our team safe and our customers safe,” Sherbo said. “When COVID-19 first hit, everybody wondered what would happen; nobody had a crystal ball.”

Indeed, no one could have foreseen how the drop in interest rates — one of many steps taken to stimulate the economy — and other factors would collaborate to stimulate virtually all aspects of the housing market and create a unique set of circumstances.

Home sales are strong, again, because of low interest rates even though fewer homes are for sale, said Sherbo, adding that he can’t recall a time when both conditions have happened at the same time.

Jeffrey Smith

“This is probably the best real-estate market I’ve seen in years. When the pandemic first hit, I thought it was going to be just the opposite.”

“I’ve seen rates this low before, but I’m not sure we’ve seen this lack of supply in quite a while,” he said, adding that it’s no surprise that many people do not want to move or sell during the pandemic, so the supply of homes for sale is limited. That creates an environment where many purchase offers are coming in higher than the asking price.

“New listings are selling very quickly,” noted Smith, adding that nearly all the houses offered for sale in early July were sold by early August.

In addition to people moving out of the city and into the suburbs to take advantage of low interest rates, Smith said the demand for second homes is exploding.

“In the last three to six months, prices have increased by 20% or more in areas like Cape Cod or Maine,” he noted. “Second homes are a hot market right now, and because there is a limited supply, properties are on the market for only a short time before they are sold.”

Then, there’s the refi market.

Gunsch said that, in addition to strong new-mortgage activity, Berkshire Bank is doing a high-volume business in refinances.

“Refis account for 52% of our closed-loan production through July,” she said, “while in the prior year, during the same period, they accounted for 35% of the closed loan volume.”

Smith added that, thanks to the robust business Freedom is doing with loan refinancing, he does not anticipate the lack of housing supply to limit the institution’s growth potential this year.

Strong housing-sales activity is even more impressive considering how the entire home-buying process had to quickly change when COVID-19 hit.

The notion of a real-estate agent walking potential buyers through a house for sale sounds almost quaint these days, as virtual tours have replaced showings, and drive-by looks at a house have become the norm.

“People are buying homes based on what they see online,” said Smith. “Many people are not even going out to the house to see it. In some cases, particularly for second homes, they are buying them sight unseen.”

Before COVID-19 struck, Smith said Freedom had limited online mortgage-application capabilities, but the virus forced the institution to quickly go all in.

“Luckily, we had the technology to be able to make a fast adjustment to online only, so we were kind of ready for it,” he told BusinessWest.

PeoplesBank launched its paperless mortgage-application system in October 2019 after two years of refining it. When COVID-19 arrived and disrupted so much of daily life, Sherbo said having a touchless system already up and running made it easier to maintain business levels.

“Our customers don’t have to meet or sign anything in person,” Sherbo explained. “The entire application process can be done online or over the phone. We were ready for this, which was great.”

Gunsch said Berkshire also uses an online application process. When an appraisal of the property is needed, only the exterior is appraised to reduce physical contact.

“Loan closings are still done in-person with everyone wearing masks and following social distancing guidelines,” she added.

Critical Deferrals

A serious concern at the beginning of the pandemic was the potential for mortgage delinquencies to spike due to homeowners affected by financial and health issues. In April, Gov. Charlie Baker signed into law a moratorium on evictions and foreclosures on consumers through March 2021.

Meanwhile, those who are struggling with COVID-related issues are encouraged to contact their mortgage holder to defer payments. The law makes it clear that, by deferring, consumers merely extend the length of the mortgage without taking a hit on their credit rating.

All the mortgage professionals BusinessWest spoke with said the deferral program has worked to keep delinquencies down and allow people to stay in their homes.

“We have a strong team in place to assist our borrowers with loan deferrals and ensure they understand their options to defer payment during this time,” said Gunsch.

Smith said that roughly 5% of Freedom mortgage holders have taken advantage of the deferral program. “We’re actually seeing our delinquencies at very low levels, lower than they’ve been in years.”

Smith added that most of the deferral requests occurred in April and May. With each passing month, the number of new deferrals continues to decline.

“The deferral program is working the way it was intended,” Sherbo added. “It’s giving people the chance to maintain their own stability and credit.”

As for inventories, even that picture may improve soon. A recent report from the U.S. Census Bureau and Housing and Urban Development (HUD) showed new housing construction starts are up more than 23.4% in July 2020 compared to July 2019. The national figure closely mirrors the Northeast, which saw a similar increase of 23.3%.

Locally, Sherbo said new home starts are relatively flat, but if interest rates continue at record lows, that would encourage more new construction in Western Mass.

Just as no one had a crystal ball back in March, none of the mortgage professionals we spoke with can really say what will happen six months or a year from now. That’s the nature of this pandemic — a high level of unpredictability.

For now, the housing market is booming at a time when few thought it would. This is good news for banks and credit unions — and for the customers they serve.

And it’s certainly one of the more intriguing stories in a year with seemingly no end of them.

Coronavirus Manufacturing Special Coverage

Making Do

Kristin Carlson

Kristin Carlson says the pandemic has actually helped business at Peerless Precision, especially when it comes to making parts for defense and law-enforcement-related products.

Mark Borsari says he hasn’t been on a plane since a vacation in early March.

By his reckoning, that’s by far the longest stretch he can remember when he hasn’t been flying somewhere, especially in his role as president of Palmer-based Sanderson MacLeod, a maker of fine wire brushes for everything from makeup kits to gun cleaning.

The six months on the ground has been a time of reflection — and even humor.

“I’m sure my wife’s probably thinking I should be on a plane more,” said Borsari with a laugh, adding that he’s not at all sure when he actually will.

But being effectively grounded from air travel is just one of the many ways COVID-19 has shaken things up for manufacturers, and, in the larger scheme of things, perhaps one of the least consequential given the way Zoom has become the preferred method for communicating with clients and employees alike.

Indeed, the pandemic has prompted everything from weeks-long shutdowns to scrambling for needed parts; from strategies for keeping employees safe to the need to manufacture different products — often PPE — to keep workers busy because demand for the products that were being produced has slowed or stopped.

Much has hinged on the word ‘essential’ — a status bestowed on many manufacturers in the 413, an area with a large number of shops making parts for aerospace, defense, or the broad healthcare sector.

Sanderson MacLeod makes products for all those fields, said Borsari, noting that, after a short but still tension-filled time of uncertainty regarding the company’s status, it was declared essential. The same with Westfield-based Peerless Precision, a company that makes, among other things, products used in the cryogenic cooling systems for thermal imaging, night vision, and infrared cameras — items that are actually in greater demand because of all the tension in the world at the moment.

Mark Borsari

Mark Borsari says being deemed ‘essential’ certainly helps, but there is too much uncertainty with this pandemic for any company to feel secure about the future.

“Any time there’s any trouble going on in the world and more money is being put into the defense budget, we benefit from that,” said Kristin Carlson, the company’s president. “We’re getting new engine parts, new fuel-injection parts … things we’ve never made before. Any time there’s unrest in our country or anywhere in the world, the Defense Department spends more money.”

But not all area manufacturers have been so fortunate. Indeed, while golf balls are important to many, they are not ‘essential’ in the eyes of the state’s governor, so the Callaway plant in Chicopee was shut down as it was heading into its busiest time of the year — the start of the golf season in the Northeast and other colder climes. And shutting down a plant that size, which was running three shifts six days a week, is a complicated undertaking, said Vince Simonds, the company’s director of Global Golf Ball Operations.

“It’s difficult to shut it down so abruptly and then wind it back up again,” he said, noting that the massive plant was shut down from March 25 until May 18, when the first phase of the state’s reopening plan went into effect. “But overall, we’ve done very well.”

Fortunately, the company has been helped by something that could not have been foreseen in those dark days of March — a surge in popularity in the game of golf resulting from the fact that it is one of the few sports people can play while also socially distancing themselves from others.

“It’s difficult to shut it down so abruptly and then wind it back up again. But overall, we’ve done very well.”

This surge now has the company running three shifts seven days a week, said Simonds, adding that Callaway is now struggling to meet global demand, especially for its lower-priced, entry-level products (more on that later).

But even for those companies that were not shut down, have not seen shrinking demand for the products they make, or been helped by the rush to take up golf, the pandemic has led to a time of challenge, uncertainty, and questions about what will, and won’t, come next. And this is a difficult climate to operate in, said Borsari, who tried to put things in perspective for BusinessWest.

“The biggest challenge is that there is no playbook for what we’re dealing with,” he explained. “This thing has come through and almost indiscriminately picked out specific companies and industries and devastated them and left others somewhat unscathed. It depends on who their market is, where they are on the supply chain, who their vendors are, who their customers are … there are so many variables.

“Normally, when you run into these challenges in business, you can at least do some research or talk to some people who have been through it before to get a gauge for what was successful,” he went on. “With this, there is none of that.”

Parts of the Whole

Flashing back to early March, Carlson noted that, at least in one respect, the company was ready for what was coming.

“We had just put in a very large order for toilet paper and other supplies from Staples,” she recalled, adding that, soon thereafter, such essentials were certainly hard to come by. “I was telling everyone that I had something like 180 single rolls of toilet paper … so if you guys can’t find any, we’ll sell it to you for cost.”

But beyond that, there was little way to anticipate, let alone prepare for, the pandemic and the many ways it was going to change the landscape for all businesses, and especially manufacturers. And for many, there was uncertainty about whether the doors would remain open as the state began to shut down businesses to help slow the spread of the virus.

Fortunately, for many, this uncertainty was short-lived.

Vince Simonds

Vince Simonds says a pandemic-related surge in the game of golf has helped take the sting out of being shut down for two months this past spring, Callaway’s busiest time for making golf balls.

“We’re the largest medical and surgical manufacturer in the country, and we also do a lot of work for government agencies and the military with gun-cleaning products,” said Borsari, adding that Sanderson MacLeod was able to get the green light from the state and the town of Palmer to remain open for business.

“Getting deemed essential was important for us,” he recalled. “One of the concerns for the people was whether they’d have a job; they were seeing all these companies shut down around them, and that was the biggest concern they had from the beginning — whether we would be allowed to stay open.”

The company has been fortunate in other ways as well, he said, noting it had undertaken catastrophic planning and redundant sourcing before the pandemic, so there were few if any supply-chain issues once COVID struck. And its supply needs are relatively simple.

“Some of these companies are putting together computers with 4,000 parts,” he explained. “We’re really working with wire fiber and attachment components; it’s not nearly a deep a supply issue as other companies had.”

Meanwhile, demand for many of the products made by the company, especially those in the gun-cleaning realm, has actually grown, again because of the growing levels of turmoil in the world.

“One of the concerns for the people was whether they’d have a job; they were seeing all these companies shut down around them.”

Carlson sounded similar tones, noting that, in many respects, the pandemic hasn’t impacted the overall bottom line; in fact, it has helped generate more business with some clients.

It didn’t look that way back in the spring, when the state’s shutdown, which most thought would last a few weeks, instead stretched to nearly two months. “At that point,” she said, “I was pretty confident that 2020 was going to be a bust.”

Instead, it’s shaping up to be better than last year — which was quite solid.

“We’re not just steady, we’re busy, and we’re getting busier,” she told BusinessWest, adding that the company had a record July, usually one of its slower months. “A lot of that’s on the defense, not aerospace, side, but also our defense aerospace has picked up a lot as well.”

But in addition to creating more work, the pandemic has also changed how work is carried out, creating a number of challenges for those managing plants, especially early on in the pandemic, when there was little guidance on how to keep workers safe — and also little hand sanitizer to be found.

“We had to get people to understand that they can’t stand shoulder to shoulder with one another — you have to maintain that six feet,” Carlson said. “I had put limits on the number of people who could be in rooms with closed doors; we’d take turns disinfecting the entire shop. In the morning, one guy does the shop floor, at lunchtime, another one does it, and at the end of the day, they do it again.”

Simonds agreed, and noted that, by strictly enforcing the rules and following the protocols, the plant has seen no cases, and no interruptions, since reopening.

“We’re sticking to the CDC protocols, and it’s worked for us,” he said. “Everyone is temperature-screened; everyone wears a mask at all times; we’re restricting meeting rooms based on square footage and number of people in the rooms; no employee gatherings beyond the number cited by the state; anyone who goes on vacation and travels outside of Massachusetts to a restricted area has to follow protocols coming back in.

“One of the challenges was just getting used to things,” he went on. “Wearing a mask, especially in the summertime, is difficult, but people have been great, and we’re all used to it now; it’s just a matter of practice.”

Round Numbers

For Simonds and his team, the state-ordered shutdown came, as noted earlier, during the busiest time of the year for the facility, which has enjoyed a resurgence over the past few years as Callaway has made huge strides in gaining market share within the golf-ball industry.

And turning everything off is, as he said, a somewhat complicated undertaking.

“For any machines that have materials in them, they have to be purged properly,” he explained. “We need to take all the raw materials that are sensitive to environmental conditions and put them in environmentally controlled areas. We need to take care of WIP — work in process — and try to process as much as possible so we don’t have time-sensitive WIP sitting on the production floor.

“It’s a matter of systematically shutting down operations so we don’t have inventory sitting in the wrong places,” he went on, adding that the process was made more complicated by the fact that no one really knew for how long the plant would be dark.

Meanwhile, on the personnel side, most all employees were furloughed — and nearly all of them came back, he went on, adding that the operation slowly wound back up, but since then, activity has sped up dramatically, with many of those employees securing large amounts of overtime.

“We’ve gone from zero to 100 as quickly as we could. Once the golf courses started opening up, the demand for product was almost unprecedented — there was so much golf being played,” Simonds said, adding that courses in most all states were open several weeks before the plant was reopened — if they had closed at all. “And the golf business has remained pretty strong; we’re chasing demand.”

The same is true at Peerless and Sanderson MacLeod, where, in addition to meeting orders, the plants are coping with new ways of communicating, meeting as teams, and planning, as much as possible, for what might come next.

And also learning and growing from the shared experience of not only coping with a pandemic and all the challenges it has brought, but in some cases thriving.

Indeed, Carlson said the past several months have brought a close workforce even closer together as they contend with the protocols, the surge in business, and a shared desire to be prepared for the worst-case scenario while hoping for something much better.

Borsari agreed, and said some of the real ‘opportunities,’ a word he’s hesitant to use in this climate, come in the broad area of relationship building when it comes to both clients and the team at Sanderson-MacLeod.

“It’s been a unique opportunity to connect with our client base in a way we haven’t done before,” he told BusinessWest. “It’s all about collaboratively figuring out the best way to keep both companies open; we’re really had a lot of good relationships become even better because we realize how dependent we are on one another.

“And as an organization, finding our way through this together has made us stronger,” he went on. “We’ve done everything we can as a company to make this a place of normalcy. Everything else around them was going crazy, and one of the key points we made in March was to do everything we can to follow the mandates and make sure our people are safe, but we also want to make sure to maintain normalcy as much as we can.”

Up Off the Floor

Looking ahead, Carlson said her company has taken what steps it can to be prepared for what might come next.

Yes, that means stocking up on toilet paper, hand sanitizer, and other pandemic-related needs that were in such short supply when the first wave hit six months ago.

“I’m ready for us to keep moving the way we’re moving,” she explained. “Even if we did walk back any of the phases of the reopening or went back into a shutdown, we’d still be open and still going at the pace we’re going, and perhaps be even busier; we’re prepared.”

But, as Borsari noted, even for manufacturers in the coveted ‘essential’ category, there is too much uncertainty to ever be comfortable, or fully prepared.

“Nothing is stable,” he said. “Just because we’re essential doesn’t mean anything’s safe or easy; so much is dependent on the attitude of the state, or the people who decide to come to work or not come into work, tariff measures, travel bans … all of these could have an impact.”

Such is life in a sector that, like most others, has seen COVID-19 change almost everything and create conditions that are anything but business as usual.

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

Coronavirus Manufacturing

Current Events

Tony Contrino

Tony Contrino says his utility’s extensive practice with preparing for weather events has certainly helped in its efforts to cope with the pandemic.

 

Tony Contrino says Westfield Gas & Electric, like all utilities, has considerable practice watching storms develop, getting ready for possible damage, and, as the old saying goes, hoping for the best but preparing for the worst.

The COVID-19 pandemic has been like that — sort of, said Contrino, general manager of Westfield G&E. It could be seen coming, and there were certainly efforts to prepare for it. But the pandemic is, in most all ways, not like weather events like Tropical Storm Isaias, which barreled through Western Mass. earlier this month, leaving sometimes days-long power outages up and down the Valley and creating huge headaches for utilities — and the customers they serve.

Indeed, those storms come and go, the damage is repaired, and life goes — until the next storm. This crisis is different, not only in its duration, but in its far-reaching effects — everything from a significant drop in electricity use (7% to 10% are the most often-given estimates), and its impact on the bottom line, to an equally sharp rise in delinquent payments, which also affects the bottom line, to changes in how work is carried out — right down to putting one person in each truck, rather than two.

But as with those weather events, area energy providers are working their way through this crisis, adapting and pivoting, as businesses in all sectors have, and encountering challenges and opportunities — again, like most all other businesses have. But, unlike many businesses, they’re providing a vital service, and thus they’re being diligent about working with, and communicating with, those they serve.

“It’s certainly a different, and very challenging, time — for us, but also for all our customers,” said Contrino. “We’ve made a real effort to communicate through all this, not only with employees but customers as well. We’re trying to keep people aware of what’s going on and what our plans are, and try to give them some assurance that we want to work with them.”

Craig Hallstrom, Eversource’s president of Regional Electric Operations for Massachusetts and Connecticut, agreed. He said the investor-owned utility has been working to keep the power on — yes, Isaias has certainly impacted those efforts — while keeping employees and customers safe.

“It’s been a very different year for us and for all utilities,” he told BusinessWest. “We have half our workforce working at home, and people have been very creative and able to adapt to their work at home. We’ve been able to work differently to do the things we need to get done. Everyone’s working differently — we’ve learned how to use videoconferencing very well — and, for the most part, we’re getting our work done.”

Craig Hallstrom

Craig Hallstrom

“It’s been a very different year for us and for all utilities.”

While making adjustments within their own operations, the utilities we spoke with said they’re working with clients, both commercial and residential, to help during this time of crisis.

Jim Lavelle, general manager of Holyoke Gas & Electric, observed that, while his utility is facing declines in revenue and sharp rises in delinquent payments — further impacting cash flow — these problems often pale in comparison to what customers are facing.

“If we were looking at our losses in isolation, we would be very alarmed, and we are concerned about the numbers,” he noted. “But when we look at the impact to the overall economy and what many of our customers are going through … we’ll figure out a way to manage and get through this.”

For this issue and our ongoing coverage of the COVID-19 crisis, BusinessWest shines a light, pun intended, on how the pandemic has impacted those in the energy business — and how they are responding.

Hitting the Switch

As he talked with BusinessWest, Contrino was just returning from a vacation — only he didn’t get as much relaxation time as he planned, or hoped. Isaias saw to that.

“I was very involved in the storm activity — I just took care of it all remotely,” he said nearly a week after the storm came through, leaving tens of thousands across the region without power for long stretches and “hitting Westfield hard,” as he put it.

That phrase is appropriate for the pandemic as well, obviously, and it applies to every community across the region. Indeed, large numbers of businesses, including some large users of electricity, such as colleges and universities and some manufacturing facilities, but mostly smaller ventures in the hospitality and service sectors, have been shut down for long stretches. And some, like the colleges, are, for the most part, still closed.

Jim Lavelle says Holyoke G&E

Jim Lavelle says Holyoke G&E was thinking about consolidating some facilities, but COVID-19 and a need to socially distance has prompted a re-evaluation of those plans.

Meanwhile, many businesses that are open are struggling and finding it difficult to pay all the bills, including the one from the utility company. And many individuals working for these businesses — or not, as the case may be — are in the same boat, with matters likely to get worse before they get any better (see related story on page 53).

All this has presented a number of challenges for utilities, who are responding, as all businesses are, with use of reserves, belt tightening, and sometimes delaying planned expenditures when possible.

While estimates on the decline in power usage vary — Lavelle also put it at roughly 10% — and the overall drop in demand has been mitigated to some degree by a very hot summer that has commanded more use of air conditioners, said Hallstrom, the bite is significant.

“Over the course of a year, a 10% reduction would mean an impact to us in the vicinity of $4 million to $5 million — and that’s a big number,” Contrino noted. “We’re cutting back, we’re not doing some of the work we would typically be doing, and we’re trying to control expenses as best we can and work our way through this.

“We anticipate that we’re going to be hit on the receivables side, and we’re planning for that,” he went on. “We’ve got funds in place to help us with that, and we’re thinking long-term — I don’t think this is going to end that quickly; I’m sure it’s going to extend into next year to some degree.”

Lavelle agreed, noting that, while Holyoke G&E is looking at a similar hit, it has been helped by some new businesses coming online, including a few involved in cannabis cultivation, which are typically large users of power.

“We’re seeing a few of those businesses start to ramp up, and that will offset some of the COVID impact,” he explained. “But the COVID impact is about 10% overall.”

And while that is, as Contrino said, a big number, it pales in comparison to what businesses across a number of sectors are facing, said Lavelle, adding that it’s important to keep things in perspective.

“We can’t compare to what some of the businesses and some of our residential customers are dealing with,” he went on. “Many of our business customers have shut down for months, and that’s been one of the frustrating things about this pandemic — seeing the customers we’ve worked with and that have worked so hard to build up their businesses go through this type of economic challenge.”

To help these businesses — and residential customers as well — Holyoke G&E, like other utilities, has been working with customers to help them through the crisis.

“Many of our business customers have shut down for months, and that’s been one of the frustrating things about this pandemic — seeing the customers we’ve worked with and that have worked so hard to build up their businesses go through this type of economic challenge.”

There is a moratorium on shutoffs for late payments — the governor put one in place for investor-owned utilities, and municipally owned operations have followed suit — and Holyoke G&E is working with individual customers to create payment plans, said Lavelle, adding that, overall, the utility has seen a 25% rise, roughly $1 million to date, in delinquent payments.

Like Contrino, Lavelle said his utility is handling the decline in revenue through reserves and some reductions in expenses, many of which are coming naturally as a result of the pandemic, such as those involving travel, training (some programs cannot be carried out remotely), and other areas.

Lines of Communication

While coping with the pandemic’s impact to their customers, and the bottom line, area utilities have, like other businesses, been forced to adjust and change how they do things.

This means everything from having some employees who can work remotely do just that, to putting one person in each service truck, instead of two; from closing offices, thereby compelling customers to pay online, to taking steps to make sure those in the pivotal control rooms are at minimal risk of exposure to the virus.

Overall, the goal, said those we spoke with, has been to keep people apart as much possible in order to keep operations moving as efficiently as possible. In fact, Holyoke G&E was thinking about consolidating some of its operations prior to the pandemic, and now, it is certainly rethinking that strategy.

“For a fairly small utility, we have several different buildings, and we had been looking at a consolidation plan,” Lavelle said. “But the distance between facilities and the number of facilities has actually helped us comply with social distancing and other recommendations associated with good COVID hygiene. So we’re revising that whole consolidation plan at present.”

Contrino said his utility’s experience in preparing for weather events like Isaias has been beneficial as it continually adjusts to life during the pandemic.

“We’ve had quite a bit of experience working through numerous storms and large-scale electric outages in the past, and have conducted various emergency-response drills over the years,” he explained. “So we were somewhat prepared to take action — although the duration of this pandemic is something we’ve never experienced before.”

Elaborating, he recalled that, as it became clear the pandemic was coming and there would be a significant impact, the Westfield G&E implemented an emergency-management plan, designated a COVID-compliance officer, and formed an incident-response team of key management personnel — a team that continues to meet regularly to discuss what’s happening and what is likely to happen in the weeks and months to come, although looking far down the road is extremely difficult.

“During this pandemic, we’re always concerned about the health and safety of our employees, our customers, and the general public,” Contrino told BusinessWest. “Although we have essential services to provide, we want to keep everyone safe; we have that balancing act going on — while we’re trying to provide our services, we’re also going to keep everyone healthy.”

Hallstrom concurred, also using the phrase ‘balancing act’ to describe how Eversource is working to keep the power flowing while keeping employees and customers safe.

He said roughly half the utility’s 8,000 employees‚ including those in finance, HR, accounting, and other business functions, have been working at home the past 20 weeks or so. Most of ‘his’ 2,800 employees, those who work to directly provide power and maintain service, have been coming to the office — in whatever shape it takes — every day.

Keeping these individuals safe has become a top priority.

“We’ve implanted many safety protocols — we promote face masks and washing hands, and instead of crews going out two per truck, we’ve had them going out one per truck,” he explained. “We’ve actually bought trucks and taken vehicles out of retirement to increase our fleet so that people can go out by themselves in a vehicle.”

Precautions also extend to service in individual homes and businesses — crews will go in only after ensuring there are no COVID-related issues at the address in question — and to the control centers, which are vital to managing the electric system.

“Day to day, we have a sufficient number of people to manage these facilities, but one of the fears from the pandemic is that if someone got sick and they passed it to fellow employees, that might quickly impact our people and make it so we couldn’t operate that system,” Hallstrom explained. “Those people are highly trained, and in the case of transmission, they’re certified, so that was a big concern.”

While some utilities had control-room personnel quarantine and stay in what amounts to a bubble, he noted, Eversource, which has several smaller control rooms, has been able to spread out its people so there are fewer individuals in a given control room, while some of these facilities were set aside as ‘sterile environments’ that employees not infected with the virus could be moved to in order to keep the system running properly.

Meanwhile, like banks, utilities have had to close their doors to their main offices, which have traditionally seen large amounts of traffic involving customers paying their bills or conducting other business. This business has now shifted online in many cases, said Lavelle, and for some customers, it’s been a big change.

“Being shut down has really impacted how we conduct business,” he explained. “We’ve had online services for some time, so a lot of it has been training customers how to pay online or sign up for a new account online; we’ve seen an uptick of more than 200% in online transactions.

“It’s been pretty seamless,” he went on. “There’s been a little bit of hand holding with some customers, but other than that, it’s gone quite well.”

Watt’s Next

Drawing one more analogy to Isaias — and all the other storms his utility has confronted over the years — Contrino said that, when it came to the pandemic, Westfield G&E prepared for the worst.

And this is the mindset that will continue as the crisis plays itself out, with certainly more questions about what’s on the horizon than answers.

“It’s been a difficult time for everybody,” he told BusinessWest. “However, we’ve put a lot of thought and effort into working through this and moving forward in a disciplined and measured manner.”

With that, he spoke for all the utilities that have been working to keep the power on — tropical storms and all — during a crisis that is testing them in every way and on every level.

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

Coronavirus

Safe at Home

By Mark Morris

Keiter Homes’ ‘project of the month’

This before-and-after view of Keiter Homes’ ‘project of the month’ is just one of many jobs keeping crews busy recently.

When COVID-19 began spreading earlier this year, it forced everyone to make adjustments. Or, as Brian Rudd put it, “The pandemic lets you know how prepared you are for change.”

Rudd, owner of Vista Home Improvement, said his company handles around 700 projects every year, and keeps everything straight by following an organized process. Once the pandemic hit, those processes had to change on the fly.

“Thanks to our staff and our company culture, we were able to adapt quickly, especially in the way we interact with our customers,” Rudd said, adding that some of the changes, such as heavier reliance on technology to interact with customers and employees, will benefit the business long after coranavirus is under control.

Amid such changes, though, several home-improvement contractors who spoke with BusinessWest tell a similar story about 2020.

Specifically, they all experienced downtime in March and April; even though they were included among ‘essential’ workers, the home-improvement business suffered a severe slowdown, as most people were not comfortable with any outsiders in their home during the early months of the pandemic.

But as more precautions have been put in place, business has returned to most companies — and, in some cases, increased over last year.

Back in December, Ger Ronan, president of Yankee Home, organized what he calls a ‘mastermind’ group of 11 home-improvement companies from all over the U.S. The point of the group is to network and share ideas about what’s working and what’s not.

“In the early days of the pandemic, members of the group came together and wanted to help in any way they could,” he said. “I got lots of ideas and strategies from companies much larger than mine, and they really helped.”

Ronan expressed a common observation as to why home renovation work has picked up. With people spending so much time at home, they are looking at faded siding, worn-out roofs, and other needed repairs. On top of that, fewer people are going away on vacation this year, opting instead to invest money in their homes.

With everyone staying put, homes are simply getting more use — and attention — than in the past.

“There’s more wear and tear on rooms in the house, especially bathrooms,” he said. “Our bathroom-renovation sales are really strong.”

Scott Keiter, president of Keiter Homes, said his company is working on a wide range of home projects. From new additions to kitchens, bathrooms, and especially outdoor living spaces, he said people want to make their houses more user-friendly in this time of increased isolation.

“We’re doing a huge deck for a client who just had a swimming pool installed,” Keiter said. “Because they are spending so much time on their property, I think people are reinvesting in their homes for their own enjoyment.”

Safety First

All three contractors follow state guidelines for COVID-19 in terms of masks, sanitizing worksites, and keeping a safe distance from clients. They also emphasized the importance of safety for their employees and clients.

“Every morning, we give all of our employees the option to not work that day if they do not feel safe,” Rudd said. “That’s become part of our daily routine, and it’s worked great.”

When working on exterior projects such as siding and roofs, Keiter said, it’s fairly easy to maintain a safe distance from the homeowner.

“It’s a little more complicated when we have to work inside the home,” he said. “A simple solution like a plastic partition wall allows us to segregate our work area from the client’s living space.”

Yankee Home uses red carpets to protect clients’ floors when working inside the home. In addition to having the carpets cleaned frequently, Ronan said, project managers from his company visit every job site to make sure all safety protocols are in place.

These contractors told BusinessWest that having people at home during renovation projects was definitely a help and not a hindrance to the job. They all pointed out how much easier it is to discuss changes to a project while the owner is on site, rather than trying to reach them at work and waiting for a reply.

Ger Ronan

Ger Ronan says people have been spending more time at home — and finding more reasons to invest in their home.

“We do a lot of customization, so it’s nice to have people there so they can tell us exactly what they want,” Ronan noted.

At a recent siding and window installation, Rudd added, the homeowner appreciated the details of the work and enjoyed seeing the job from start to finish. “We love people being home because they can see the craftsmanship and what goes into the investment they’ve made with us.”

One trend developing as a result of so many couples working from home involves ‘his and her’ home-office spaces. Keiter, who builds new homes as well as additions, said he has not worked on such projects, but expects he might get requests in the near future. Long before the work-at-home explosion, his clients have wanted home-office setups either for work or to stay in touch with distant family members online.

Scott Keiter

Scott Keiter

“We’re doing a huge deck for a client who just had a swimming pool installed. Because they are spending so much time on their property, I think people are reinvesting in their homes for their own enjoyment.”

“Whether it’s a dedicated office space, flex space, or a study, many plans call for one room in the house that’s being dedicated for computer use,” he explained, noting that the next trend in home offices will likely involve upgraded wireless infrastructure. “From parents working at home to kids trying to go to school online, and all the other laptop and iPad use, I think we will be seeing more sophisticated wireless access points in the home.”

Security Blanket

Though business is booming now, Ronan predicts that the pent-up demand caused by COVID-19 will eventually dissipate, but won’t reduce business too much.

“You know the old adage of, no matter how bad the recession might be, you’ll always get your haircut,” he said. “Well, we’re not quite up there with hairdressers, but you’re always going to take care of your home.”

Rudd said 2020 reminds him of the period right after 9/11 when people saw the home as a security blanket. Similar to that time, his clients are focused on ‘nesting’ in the safety of their home — so it’s not surprising his business is up 32% over last year.

“Anything related to the home is booming,” he noted. “Friends of mine who are landscapers are having record years, too.”

Homeowners have long been advised to make renovations to their kitchens and bathrooms because money spent on those two rooms will provide the best return on investment if the house ever goes up for sale. While kitchen and bathroom renovations remain popular, Keiter said, he’s finding that people are investing in those spaces for a different reason: quality of life.

“We’re staying at home because the virus has made the world unpredictable in so many ways,” he told BusinessWest. “With all this uncertainty, putting money into our homes seems like a pretty safe bet.”

Coronavirus Law

A Stern Test

By Marylou Fabbo

With schools reopening, parents and employers will be in a difficult boat together as they attempt to juggle parenting with personal and professional responsibilities.

Parents are understandably anxious about how they will meet their obligations to both their children and their employers. Several school districts have announced hybrid returns with students alternating between attending school and remote learning. Some jobs just can’t be done from home, and some parents who would otherwise be able to work at home will be needed to help their children with remote learning (or breaking up arguments).

To make matters worse, schools that are already back in session have shown us that, despite precautions that are being taken, school-based COVID-19 outbreaks are a real concern.

Employment-law Compliance

There is no question that many parents will be working from home in some capacity once the school year starts. Businesses should keep in mind that laws that are applicable in the workplace don’t go out the door simply because the workplace has moved to an employee’s home.

Marylou Fabbo

Marylou Fabbo

“Does workers’ compensation insurance apply when an employee trips over a toy during the workday and fractures her ankle?”

For instance, Massachusetts employers must continue to make sure their employees take their 30-minute meal break and keep records of all hours worked, which may not look like the normal 9-to-5 workday. State and federal laws that require employers to provide a reasonable accommodation to disabled employees in the workplace apply to remote employees as well.

To meet these requirements, employers may need to do things such as make adjustments to equipment or the manner in which work is completed. Notices that must be posted in the workplace should be electronically distributed or mailed to an employee.

Still, there are many unanswered questions, and businesses are advised to consult with legal counsel before taking any risky actions. For example, employers are required to reimburse employees for required business-related expenses, but what does that mean when employees use their own laptops and internet for at-home work?

Does workers’ compensation insurance apply when an employee trips over a toy during the workday and fractures her ankle? How does an employer prevent and address sexual harassment in the remote workplace? Is it discriminatory to distribute extra or different tasks that can’t be done at home to older employees who no longer have kids at home? All these issues should be discussed with your employment-law advisors.

Job-protected, Paid Time Off

Not all employees will be able to work when their children are taking classes from home. Employers should be prepared to work with a reduced staff for the foreseeable future. Federal laws will provide many parents with job-protected time off when school is closed, which includes situations where some or all instruction is being provided through distance learning.

The Families First Coronavirus Response Act (FFCRA) generally requires employers to provide paid time off to employees who cannot work (or telework) because their child’s school is closed. However, it’s not enough that a child is attending class remotely. The parent must be needed to care for the child, and the child must be under 14 absent special circumstances.

Still, the FFCRA does not cover all employees or all employers. Employers with 500 or more employees are not covered by the law, while small employers and healthcare providers may be exempt from certain requirements. Also, employees who have been employed for less than a month are only eligible for a maximum of two weeks of ‘emergency sick’ leave, while employees who have been employed for at least 30 days may be able to take up to an additional 12 weeks of expanded family and medical leave (EFML), including on an intermittent basis, assuming that the leave hasn’t already been taken for other permissible purposes.

Eligible employees can earn up to $200 per day when taking childcare EFML, subject to certain maximum dollar amounts. Lawmakers in several states, including Massachusetts, are considering legislation that would fill the gaps in the FFCRA’s paid-leave provisions, and several states have already extended virus-specific paid leave. Employers whose employees aren’t eligible for protected leave will have to decide whether to allow job-protected leave or lay off or otherwise separate with the employee.

School-related Exposure

Unpredictable, illness-related absences can pose another challenge for employers and employees. Children may be exposed at school and bring the virus home.

Employees may be needed to care for their children who are ill and may even test positive themselves. The FFCRA provides up to two weeks paid time off for COVID-related illnesses. The Massachusetts paid-sick-leave statute and the FMLA may also provide employees with paid time off. Employees may also be able to take protected time off (or time at home) as a reasonable accommodation for the employee’s own disability that makes it risky for the employee to go into the office.

Plan Ahead

There’s never been a return to school quite like 2020. The only certainty is that employers could not possibly plan for all potential scenarios. Businesses should make sure they have effective remote-work policies, practices, and procedures in place, be prepared to operate with fewer employees on an intermittent and possibly long-term basis, and designate one or more people within the organization to whom management and employees can direct their questions.

Marylou Fabbo is a partner with Springfield-based Skoler, Abbott & Presser, P.C., a law firm that exclusively practices labor and employment law. She specializes in employment litigation, immigration, wage-and-hour compliance, and leaves of absence. She devotes much of her practice to defending employers in state and federal courts and administrative agencies. She also regularly assists her clients with day-to-day employment issues, including disciplinary matters, leave management, and compliance; (413) 737-4753 ; [email protected]

Coronavirus Cover Story Modern Office

The Future of Work

Michael Galat

Michael Galat, vice president of Employee Services at Big Y.

When businesses sent employees home in mid-March, many thought it would be for just a few weeks. Instead, as the pandemic lingered, weeks stretched into months, and now, even as companies are allowed to bring their teams back on site, many have not. The reason? Employers say it makes little sense to risk their people’s health if they can do their job just as well at home. But … if they can work effectively at home, why bring them back at all? That’s a conversation many companies are having as they ponder the future of the workplace in the COVID-19 era.

Big Y Foods is one of the region’s largest companies, with more than 11,000 employees throughout Massachusetts and Connecticut. It has also been an essential business throughout the pandemic, so it never shut down.

Many of its employees — those who stock shelves, prepare food, work the cashier lines, and do any number of other tasks — must do their jobs on site, in a specific location. But at Big Y’s 300-employee-strong customer-support center in Springfield, which supports those frontline workers, that wasn’t necessarily the case.

“About 80% of them started working from home once COVID-19 started gaining traction,” said Michael Galat, vice president of Employee Services at Big Y. That shift meant setting everyone up with the right equipment if they didn’t have it at home, and also putting together a best-practices guide for working remotely. “Whether people are working remotely or not, they need to have access and be available to support those locations.”

The lesson learned over four months? They did their jobs just fine. And until COVID-19 begins to subside in earnest, Big Y is taking its time bringing employees — at least the ones who don’t have to work in the stores — back to their pre-pandemic workspaces.

“We’re definitely taking our time. We’re at about 30% in the support center now,” Galat said. “Obviously this is peak vacation time, but we are slowly, and I mean slowly, reintegrating people in the support center.”

PeoplesBank is learning similar lessons about what employees can accomplish at home, said Amy Roberts, chief Human Resources officer.

“There’s always a concern, when you don’t have someone on site, because you can’t see what they’re doing. Are they working?” she said. “But we haven’t really missed a beat in terms of productivity levels. Some people like working from home — it works for them — while some people prefer working in the office, and they can’t wait to come back. But for overall productivity and meeting the needs of customers, we haven’t had any concerns.”

Roberts doesn’t see a day, post-pandemic, when the majority of bank employees are still working at home. But functioning so well over the past few months has at least gotten HR leaders talking.

“Is this something we can do on a more permanent basis? We’re still trying to figure out the right blend. But there seems to be some opportunity for flexible work options, and I think we’re going to do that in the future.”

“Is this something we can do on a more permanent basis? We’re still trying to figure out the right blend,” she told BusinessWest. “But there seems to be some opportunity for flexible work options, and I think we’re going to do that in the future.”

Patrick Leary has had those conversations, too. As a partner with MP CPAs, he understands that much of his business is face to face with clients. “But I don’t think we’ll go back to 100% on site.”

Elaborating, he explained that “the model of having everyone show up at 9 o’clock and work all day until 5, then go home, I think it’s really been proven that it doesn’t need to be that way. Yes, we need to have people available, and we can’t have somebody that decides, ‘I want to enjoy my day, so I’ll start the workday at 5 p.m. and work till 1 a.m.’ — although some of the 20-somethings might like that; me, I need to be in bed by 9.”

But while it’s true that employees need to be available to field phone calls and take appointments during core work hours, he went on, it may not be necessary to have everyone working in the same place at the same time.

“I think our ideas about what is a regular workplace have completely changed,” Leary went on, and it wasn’t sending everyone home in March that shifted those ideas; it was how long the stay-at-home trend has lasted.

Amy Roberts says PeoplesBank

Amy Roberts says PeoplesBank has to balance the benefits of working at home with the interactive employee culture it has cultivated.

“If everyone went home, and two weeks later they were back in the office, we wouldn’t be having this conversation,” he noted. “But we’ve proven in four months that people can work at home, work efficiently at home, and accept working at home.”

These three companies — a supermarket chain, a bank, and an accounting firm — all have totally different business models and customer needs, yet they’re all saying the same thing when it comes to the workplace of the future, and specifically whether remote work is here to stay: nothing is set in stone, but it’s a conversation worth having.

Shifting on the Fly

Shifting to remote appointments back in March was a smooth process, Leary said, partly because all the clients were working remotely, too.

“That part of it was not overly challenging,” he added. “And we had stress-tested our internal systems about a month earlier as good practice, just to see how we were doing. We did some modifications, so system-wide, we were in good shape. We had been using voice over internet for the phones, so when someone called at the office, it could ring at the house. So we were good there.”

The company did need to work through some quality-control issues, however, especially since the team was being physically separated during the heart of tax-preparation season.

“That, to me, was the biggest challenge,” he said. “Most people are accustomed to doing that in face-to-face settings, but we did it with everyone at home. We developed some protocols for how that would work.”

The firm created a schedule for individuals to come to the office to pick up packages, scan documents, and send them to the right people.

“The model of having everyone show up at 9 o’clock and work all day until 5, then go home, I think it’s really been proven that it doesn’t need to be that way.”

“Then there was the whole PPP thing, working with virtually all our business clients, showing them how to apply for it, and making sure they knew they rules, which were evolving almost daily,” Leary recalled. “We had a core group staying really closely involved and on top of the regulations, and we did a couple of webinars for clients.”

Then there was COVID-19 itself. “We were helping clients through their issues with business being called off — what do they do for cash flow?” he went on. “But the biggest challenge for me was that it all occurred during our busiest time.”

Banking customers were dealing with some of the same issues, as well as their usual needs, and PeoplesBank leaders were quick to make sure employees were set up to work at home.

“In a matter of two weeks, we assigned something like 150 Chromebooks and issued VPN access to all office items,” Roberts said, noting that about 170 people who work in the office were sent home to work. Some, who could not get the access they needed for whatever reason, were paid until the issues were resolved, and they began working from home as well.

These days, the main office is about 25% occupied, with most still working totally from home and others coming into the office one or two days a week. Like Leary, Roberts said discussions have already taken place regarding what the past four months mean for the future of remote work.

“There are definitely limitations, if we’re going to pursue it is a work type,” she said. “We’re going to need technology that ensures full access and takes care of the little things you experience when you’re at home instead of the office, like system slowdowns and delays.”

In short, if PeoplesBank is going to expand remote work in perpetuity — and not just because a pandemic has forced much of the work world home — it needs to the same experience from a work standpoint. “We’ve highlighted things that can be better. But for the most part, it’s been pretty seamless.”

Leary said the current situation has opened his eyes to internet infrastructure needs in the community, especially in places like the hilltowns, which can run into slow speeds and spotty cell service. “If this becomes the new norm, we can’t have someone working in their house who can’t connect to the outside world efficiently.”

Remote Learning

For a company like Big Y — which, between its supermarkets, convenience stores, and gas stations, is a 24/7 operation — flexible work options on the customer-support side make sense, Galat said.

“We’re able to give flexibility to that employee who may have childcare issues, or is caring for an elderly parent, and it allows us to support our stores while minimizing the amount of people who come in here,” he said, which remains an issue with the pandemic still a threat. “So having flexibility of schedule helps their personal lives and also our workplace.”

Patrick Leary

Patrick Leary says a shift to more permanent work-at-home options will require an investment in technology.

Claire D’Amour-Daley, the chain’s vice president of Corporate Communications, agreed. “Some have even felt more productive at home than here. It will certainly be part of the workplace of the future.”

She was especially impressed that the company was able to shift how it did business — not just moving some employees home, but taking steps to protect the ones in the stores — essentially on the fly.

“We’re used to working quickly, but not that quickly,” she said. “The stores were slammed the first few weeks, and this added yet another element of urgency. But we never stopped; we quickly pivoted to serve our stores and our customers in an unprecedented manner.”

“We made it work, and we needed to,” Galat added. “We needed to stay connected more than ever during this time.”

That said, “there are more discussions to be had,” he continued. “Absolutely, some lessons were learned — we’re able to support our locations — but when you look at the company-culture part of it, you lose that social aspect.”

To counter that, remote employees have been conferencing over Zoom three or four times a week, in some departments every day. Meanwhile, they’ve been issued guidance for working efficiently at home, from creating a comfortable, ergonomically correct work area to setting aside time for mind-clearing breaks.

“Eighty to 85% of the feedback has been positive,” Galat said. “People have been able to get their products done. Some have missed the social element, but for others, there’s value in the time saved not commuting in traffic.”

PeoplesBank has long promoted an interactive, employee-centric culture, and that has to be considered when pondering the future of the workplace.

“We rely on that interaction and engagement you get by being in the office together as a group,” Roberts said.

“Making sure we can continue that interactive part of our culture is something I’m really focused on right now. That’s a tricky one. If you have a completely remote workforce, you lose some of those engagement opportunities, and you have to shift some of the ways you engage. We’re not going to let that stop us from pursuing flexibility, but we have to consider the great culture that we have.”

Home or Away?

While employee culture and technology requirements are certainly legitimate topics of discussion, none of the professionals who spoke with BusinessWest expressed much concern about employee accountability and efficiency — “our concerns about people not doing their work dissipated pretty quickly,” D’Amour-Daley said — meaning remote workers may indeed have a broader role in the future.

“It’s been interesting to say the least,” Leary said. “I’ve fallen into a pretty good routine from day one. I’ve tried to make it a regular day: shower, get dressed — not in a suit, but not pajamas — and sit down at my computer. It makes for a more normal routine than saying, ‘I’ll get to work when I get to it.’ And I think most people would feel the same.”

Expanded use of remote work would also open up opportunities for both companies and employees, especially those who want to live in, say, Boston or New York City, he noted. Those individuals could expand their job-search horizons, while Western Mass. could become a more attractive place for businesses to set down roots, taking advantage of the region’s relatively low lease rates while hiring from afar.

All these opportunities can only open up if remote work proves a viable option. And companies of all types are starting to think it is.

“I haven’t had a single client call and say, ‘hey, I was talking to Sally, and I heard a dog barking in the background; it was really distracting,’” Leary said. “I actually think the idea of working from home is good for people. In that time they’d be commuting, maybe they’re exercising or spending more time with their family.

“People do miss the social interaction,” he was quick to add. “Maybe they live alone, or it’s just them and their significant other in the office.”

But the employees of MP CPAs who are back in the office — about half the team — are there by choice, he said, with others choosing to remain at home.

Because it works. And employers like things that work. So, in this era of Zoom and home offices and (sometimes) pajamas, they’re paying attention.

Joseph Bednar can be reached at [email protected]

Coronavirus Special Coverage

Step Inside

Jade Jump and Nate Clifford

Jade Jump and Nate Clifford, owners of Cornucopia in Northampton.

For Dave DiRico, the forced shutdown of retail outlets across the Commonwealth in March could not have been more ill-timed.

After all, late March is when many golfers, a good number of them armed with gift certificates from the holidays, start filing into his store in West Springfield, DiRico’s Golf & Racquet, and reload for the coming season. They come in looking for new clubs, balls, bags, shoes, and other accessories.

And they keep coming in through the spring, said DiRico, noting that, aside from the holidays, March, April, and May are by far his busiest months.

But not this year, obviously, as he was closed completely until early May and then open for curbside sales only — something this business isn’t really suited for — for several weeks.

But when he did reopen … well, the surge in business might not make up for everything that was lost during the shutdown, but it has been significant and in many ways surprising. Indeed, in addition to what could be called pent-up demand — people who needed to reload and had to wait until he was open to do so — the pandemic has actually created a mini-explosion of interest in golf, because it’s one of the few sports that can still be played under the current restrictions and advisories on social distancing.

“Things took off … it’s been crazy,” DiRico told BusinessWest. “One of the few outdoor activities you can have right now is golf; we have kids who were supposed to do internships and can’t, and they’ve taken up golf. We have kids who played baseball and summer sports and couldn’t play those, so they’ve taken up golf. We have spouses who’ve never played the game who have taken up golf.

“Couple that with our regular business,” he went on, “and June and July have taken off like a rocket ship.”

Nate Clifford has also navigated the ups and downs of shutting down and reopening at Cornucopia, the natural-foods store he and his wife, Jade Jump, own at Thornes Marketplace in downtown Northampton. They were among many shop owners who had to shift their business model on the fly to survive the past few difficult months.

“Shoppers are saying, ‘I just wanted to shop with somebody locally.’ We’re hearing a lot of that. I think that’s awesome.”

In fact, March 15, the day they and all the other Thornes stores shut down, was the couple’s one-year anniversary of buying the 40-year-old establishment. Though sales of food and wellness products may have made Cornucopia an essential business in the state’s eyes, Thornes made a decision to shutter the whole complex, and that meant Cornucopia, too.

“We understood, but we made an impassioned plea to the landlord to give us some access for pickup and delivery, with the goal of helping people, especially the older population around here who need us,” Clifford said. One day later, on March 16, they were back in business with that new model.

“We put a simple order form up on the website and told people, ‘you shop here; you know what’s here — what’s your wish list, and we’ll get the best possible order for you.’ We delivered, or you could pick it up and we’d run it out to you, put it in your trunk or in the passenger window, whatever you were comfortable with. We did that for three months, and we were overwhelmed with the support we got.”

That support was certainly reflected on June 15, the first day shoppers were allowed back in the store itself. “We had such a rush of people, I had to step into the back room to shed a few tears,” Clifford said. “I thought, ‘we’re going to be OK.’”

Unfortunately, not all retailers can say the same thing. They’ve seen some pent-up demand, to be sure, but 2020 is turning into a very challenging year as many shoppers are staying home, cutting back on their spending (or both), and doing most of their buying online.

Still, retailers are happy to be open again, even if the long-term outlook is mixed, and consumer confidence remains uncertain.

One Step at a Time

Sharon Cohen, who has owned Footbeats for Women at Thornes for the past four years, noted that, without college students and tourists from out of town, business is slower than is typical for this time of year, but customers are returning steadily. She’s happy to see them, especially after instituting the safety measures mandated by the state — and by common sense.

“We’ve revamped the way the store is laid out to promote social distancing,” Cohen said. “Shoppers are saying, ‘I just wanted to shop with somebody locally.’ We’re hearing a lot of that. I think that’s awesome.”

After Thornes was shut down in mid-March, Cohen launched a website so customers could still purchase her shoes, and, like Clifford, she delivered to peoples’ homes. Every Friday afternoon, she used Facebook Live to talk about shoes in stock and offer commentary on trends and new styles.

“I’d pick them off the displays on the wall and talk about them. Customers would text and ask questions about cost or size,” she said, noting that she will likely continue that practice. “We tried new, inventive ways to meet the customers.”

In the store, she tries to strike a balance between customer needs and safety; for example, when customers try on a pair of shoes, if they are leather and cannot be sanitized, the shoes are put in quarantine for 24 hours, as per Centers for Disease Control and Prevention (CDC) guidelines.

Dave DiRico

Dave DiRico says a mini-explosion in the popularity of golf has helped offset some of the huge losses incurred when his shop was shut down by the pandemic during the spring.

Thornes management has instituted many new protocols and equipment, including iWave ionizing air filters that heighten air quality, foggers that sanitize the building nightly, and door monitors at each of the two open entrances to ensure that people entering wear masks and sanitize their hands. The complex also installed hands-free door openers on bathroom doors.

“Thornes has done a lot to prepare for our opening, and we continue to stay educated and follow safety protocols,” said Richard Madowitz, the marketplace’s co-president. “We are receiving consistent positive feedback from shoppers on the cleanliness of the building and their comfort. We are providing a safe environment.”

All shared tables and chairs on the building’s second and third floors have been removed, and directional arrows on the floors separate traffic and promote social distancing.

“Signage is everywhere,” Madowitz stressed. “Each store is managing its state-mandated capacity count, and Thornes itself is managing the state-mandated capacity counts for its common spaces without shops.”

“I make sure people who come into the store feel safe. I’m doing what I feel is right by my customers and staff. That’s my focus.”

Mask compliance is high, at 99%, he noted, adding that “masks are not required for those with medical conditions that prevent them from wearing one.”

Despite what he calls a “vocal minority” making waves nationally about mask wearing, Clifford said his customers have been respectful of the mandate.

“We’re dealing with people who have health issues, and I’d say the average customer spending big amounts is over 50, getting supplements, taking to our expert staff. We want them to feel safe,” he told BusinessWest. “For those folks who don’t want to wear masks, even for legitimate reasons, we still have pickup and curbside. But I make sure people who come into the store feel safe. I’m doing what I feel is right by my customers and staff. That’s my focus.”

Visitors to Holyoke Mall are greeted with a similarly wide range of mandates, from face coverings and six-foot distancing to directional arrows and guidance to wash hands, use sanitizer, and avoid touching products unless purchasing them, said Lisa Wray, the mall’s director of Marketing.

In return, the mall has enhanced its cleaning and sanitizing of the common areas and numerous touch points, restrooms, seating areas, and food court, and the cleaning team is utilizing new electrostatic sprayers, leveraging the same technology used to clean hospital rooms, using an approved disinfectant recommended by the CDC. In addition, Holyoke Mall employees, security, housekeeping staff, and contractors undergo daily health screenings.

Sharon Cohen

Sharon Cohen says she used online outreach and a sales website to stay afloat during the shutdown.

All those steps were necessary, Wray said, to not only bring customers back, but make them feel safe upon return.

“Having our tenants close with thousands of employees and their livelihoods impacted is certainly difficult; however, the safety and well-being of our guests, employees, and tenants is of primary importance,” she told BusinessWest.

“We have been seeing guests steadily return to the shopping center, and even with reduced occupancy, tenants have been seeing strong sales,” she added. “With the back-to-school season upon us and the sales-tax holiday weekend at the end of August, we’re hopeful the months ahead will continue to trend positively. We’re cautiously optimistic that the fourth quarter will continue to ramp upward, as guests adapt to this new way to shop.”

Warning Signs

That optimistic view isn’t shared by the entire retail industry. Just last week, two businesses at the Shops at Marketplace in downtown Springfield — Serendipity and Alchemy Nail Bar — announced they were closing, unable to stay afloat after the forced pandemic closure and an inability to procure business aid from either the federal Paycheck Protection Program or the city’s Prime the Pump grants.

Meanwhile, on a national level, Tailored Brands, which owns suit sellers Men’s Wearhouse and Jos. A. Bank, is closing hundreds of stores and drastically reducing its corporate workforce as the pandemic continues to decimate the retail industry.

GlobalData Retail recently noted that year-over-year sales of men’s formal clothing fell by 74% between April and June, and not just because stores were closed. “While this deterioration will ease over time, demand will remain suppressed for the rest of 2020 and well into 2021 as office working, business meetings, and socializing are all reduced.”

Fortunately for DiRico, the pandemic has done the opposite in the golf sector, creating some opportunities in the form of new players who need equipment — with many of them using stimulus checks to buy it. But there are challenges as well, starting with shortages of stock caused by closure of factories and then restrictions on capacity.

“Our biggest problem right now is getting equipment,” he explained. “That’s because most of our manufacturers are based in California, where only 40% of the factory is open, which means they can only produce ‘X’ amount of clubs for the world; it’s slow in getting equipment.”

Other challenges include the many the new rules and protocols regarding social distancing and sanitizing, he went on. Still, for the customer, things are pretty much business as usual, meaning they can still try on shoes or gloves and take a few practice swings with a driver in the simulator.

‘Normal’ is not a word that comes to mind when describing operations or this year in general, but overall, the surge the game has seen will certainly help make 2020 less forgettable, DiRico went on, and it offers considerable hope for the future — if those who have taken up this difficult, expensive, and time-consuming game can find a way to stay with it.

“For the past 15 years or so, golf has been on the decline,” he said, listing cost and time among the big reasons. “Now, some of the pros I’ve talked with say they’re booked solid; they have tee times from 6:30 to 4. And membership at the country clubs is up. If these clubs can retain just 15% of these new golfers, they’ll be in good shape.”

For Cornucopia, the pandemic offered an opportunity to build an online, pickup, and delivery presence it might not have otherwise, Clifford said — one it will continue to maintain, opening up new business avenues.

“We were thrilled to be able to pivot to that quickly. That’s one thing Jade and I do well, being flexible and doing whatever we need to survive. We’re resilient, and now that we have a strong foundation, if we were ever to experience another shutdown, we’ll be able to continue the cash flow.”

These days, sales volume isn’t what it was on reopening day on June 15, and won’t be until colleges are back in session. “That’s when you normally see more foot traffic; July is not a busy retail time,” Clifford noted, adding that a weakened tourism season isn’t helping, as even visitors to the Berkshires often make their way to downtown Northampton for an afternoon. “That’s not happening right now.”

But he’s cheered that all the Thornes businesses are open seven days a week. “That has caused a lot more consistency in the shopping experience, when the stores are open and welcoming people and wanting them to come in and physically shop.”

And hoping that extended shutdown is a thing of the past.

Joseph Bednar can be reached at [email protected]

Coronavirus

Driving Forces

Ben Sullivan

Ben Sullivan says inventory has been an issue for many car dealers, but overall, the picture is much brighter than analysts were predicting in the spring.

Back in the earliest and darkest days of the pandemic (at least in this part of the country), analysts within the auto industry were predicting that overall sales for 2020 might be off perhaps as much as 80% from the year prior.

Those projections turned out to be well off the mark, as were some of the later estimates as well, said Ben Sullivan, chief operating officer for Balise Motor Sales, adding that a number of factors have made this year — and it’s a little more than half over, so a lot can still happen — much better than perhaps anyone could have imagined back in late March and early April.

These factors include stimulus checks that provided some disposable income for many people, as well as some extremely attractive incentives from the manufacturers, including 0% interest for as many as 84 months, job-loss protection, and no payments for six months.

“From an auto-dealer standpoint, I don’t think we were intended to be direct beneficiaries of any stimulus money,” Sullivan said. “But what the consumers are doing with the money has certainly offset what we expected to be a much steeper decline in the auto business than what we have actually experienced.”

But some of these same factors, coupled with pandemic-forced factory shutdowns, have created a slew of challenges for auto dealers as well. These include shortages of inventory for new cars, although there seems to be some improvement on that front, according to those we spoke with, and an even more pronounced shortage of used cars, which is spurring something almost historic when it comes to the prices offered to those willing to trade in vehicles or just sell them outright — something that’s happening with increasing frequency.

“There’s an unbelievable shortage of used cars,” said Sullivan. “There just weren’t as many cars coming into the system, for a variety of reasons, and that made used-car trade-in values go up. And people are recognizing that and saying, ‘if there if was a time to trade in a car, now’s the time’ — and that’s helping the new-car market.”

As for overall inventory, a drive by any dealership in the area would reveal fewer cars in the lot, a clear reflection of what’s happening with both new and used vehicles, said Peter Wirth, co-owner of Mercedes Benz of Springfield, noting that his store is typical in most respects. There’s a smaller supply of used cars (only about 12 days, as opposed to the 30-to 45 days that would be typical) and fewer new cars as well as the factories try to catch up for the time lost when they were closed or making other products, such as respirators, in the case of General Motors.

“There just weren’t as many cars coming into the system, for a variety of reasons, and that made used-car trade-in values go up.”

The situation is improving, though, and by late August, most expect a return to something approaching normalcy.

“We’re starting to see inventories coming back, which is exciting for all of us,” said Carla Cosenzi, president of TommyCar Auto Group, adding that, while the landscape may change and there remains a good deal of uncertainty, there is currently demand for those cars that will soon be filling the lots.

Which is good because, while sales of used cars (if dealers can get them) have been more than solid, new-car sales have been off — but, again, not as much as the experts thought they would be back when states were shut down and governors were rolling out phased reopenings.

“I’d say, on average, the sales pace for the new-vehicle industry in the Northeast is probably down 10% to maybe 15%,” said Sullivan, adding that these numbers could not have been imagined back in the spring, when it looked like the bottom might fall out of the market.

Looking ahead … well, looking ahead is something that’s difficult in any sector. But those we spoke with said that, overall, dealers are in decent position for quarters three and four. Inventories are improving, there is still some pent-up demand, there are still plenty of incentives, and new models are arriving on many lots.

But as they’ve seen already this year, things can change in a hurry, and projections — as those made way back in March can attest — are difficult to make.

Hitting the Accelerator

As he talked with BusinessWest at the Mercedes dealership on Burnett Road, just off turnpike exit 6, Wirth noted that, in many respects, a touch of normalcy has returned to this store, and the business of car selling in general.

Indeed, he noted there were several people sitting in the service waiting area, more than there would have been back in the spring, when ‘pickup and dropoff’ was the order of the day — and it’s still a popular option. Meanwhile, all employees are back at the dealership — many of those who could were working remotely in the earlier days of the pandemic — although there are now vacant workstations between those with people, and some sport plexiglass dividers between them. Perhaps most importantly, business is … well, perhaps not normal, but it’s certainly in the ballpark.

Peter Wirth

Peter Wirth says business is returning to something approaching normal at Mercedes-Benz of Springfield, and the summer and fall look promising as new models roll in.

In many respects, the dealership is well-positioned for a solid year, despite the pandemic and various negative forces it has created, Wirth said, listing everything from those aforementioned factory incentives — Mercedes has them as well — to lingering, pent-up demand; from new models arriving regularly to the mix of vehicles consumers are demanding.

“This might be the second year that we’re producing more SUVs than cars on the new-car side, and we’re almost at 60-40 now,” he explained. “It took us a couple of years to get there, but that’s what the market wants. So, maybe for the first time in five years, we’re actually in sync with what the market wants, and I think that’s going to help us.”

But while there are some signs of normalcy and even progress when it comes to sales volume, there are reminders everywhere that these are very different times — from the masks on the customers and employees to the deep cleaning that accompanies every car that leaves the service bay, to the cars in the lot, or the lack thereof, to be more precise.

Sullivan told BusinessWest that inventory has been an issue across the broad portfolio of makers within the Balise stable. Closed factories were a big contributor to the problem, he said, but supply-chain issues were, and still are, a factor as well.

“Next to the tsunami that hit Japan, the pandemic and everything it has brought has had perhaps the most impact the auto industry has seen since World War II,” he explained. “The supply chains got interrupted, and this is a global industry; there’s parts from Scandinavia, China, Japan, Mexico, Canada, the list goes on. And it really only takes one part to not be able to have a production line running.

“If you have a plant that goes down, and you’re missing that key component, you can’t build an F-150, or a Silverado, or a Camry,” he went on. “The industry has been absolutely disrupted from an availability standpoint. But the good news is that it’s a pretty resilient industry; they find other suppliers and ways to navigate through. But we are a low point of availability.”

Some makers were hit harder than others, he continued, noting that General Motors never fully recovered from the strike of last year before the pandemic hit, and the arrival of COVID-19 further complicated matters, especially when it comes to the production of trucks, one of the more popular items in recent years.

Unlocking Options

Overall, though, and especially as the summer has progressed, buyers have had a better time of trying to find the make, model, and color they want. Mercedes has a sister store in New York that effectively doubles the dealership’s chances of quickly supplying want the buyer wants, and Balise and TommyCar have similar relationships within the industry.

Some are settling for maybe their second-favorite color or a model with most but not all the options they were looking for, said those we spoke with, while others chooose to wait for exactly what they want. And the wait is getting slightly shorter.

“We’re lucky that we carried a good days’ supply of inventory before this happened, so we were in a good position as far as the number of units we were able to maintain through this, and now, we’re starting to see the manufacturers supplement the inventory back,” Cosenzi said. “But the biggest hurdle was being able to get the exact specifications a customer was looking for when it came to new cars.”

If the new-car market is getting somewhat back to normal, the same can’t really be said for used-car buying, which, as noted earlier, is in what would have to be called uncharted territory — or at least a place visited very infrequently.

Using words and numbers, those we spoke with said demand for used cars is through the roof — even for convertibles — and this is definitely a sellers’ market.

Carla Cosenzi

Carla Cosenzi says getting used cars has been a real issue for most car dealers, and that will continue to be a challenge for the foreseeable future.

Sullivan knows, because he recently was a seller — if you count trading in as selling.

“I traded my wife’s car in two weeks ago, but it really is the best time you could ever ask for,” he said, adding that prices are up, on average, almost $1,800 per car over the past few months. “With my car, I got $2,000 more than I would have two months previous — or two months from now. It just happens to be that timing in the market — the used-car market has defied every industry analyst’s predictions during COVID.”

Overall, a number of factors are contributing to the bustling used-car market in the 413, Wirth said. For starters, this is more of a used-car market than a new-car market, and from all he can gather — he’s been in it for four years — it always has been. What’s more, with the pandemic creating questions about the future and some economic uncertainty for many, used cars are being seen as an attractive, less risky option than buying new — even with all those incentives from the carmakers.

But supply, as it is with new cars, is perhaps the biggest driving force.

“I think that the used-car market will fall at some point, but you never know; it’s so hard to predict what’s going to happen given the circumstances.”

Sullivan told BusinessWest that most all of the auction houses where so many used cars are acquired by the dealers were closed for a long stretch early this year, removing those supplies. Meanwhile, many leases were extended due to the pandemic, taking those cars out of circulation. And some consumers simply decided that, given the conditions, they would hang onto their car for at least another year.

All this forced dealers to look elsewhere and explore options ranging from buying some of the suddenly unneeded rental cars cluttering lots across the country to buying cars off the street, a tactic Balise deployed.

And that imagination has been needed, because demand — fueled by cautiousness in the era of COVID-19 and other factors — has certainly spiked.

Bottom Line

As for what happens next … it’s hard to say with any certainty, because there are so many unknowns when it comes to the virus, the economy, additional stimulus, and other factors.

“There’s so much uncertainty, but especially when it comes to where the customer demand will settle in,” said Cosenzi. “And we’re prepared to adjust our operations accordingly. We’re starting to see a lot of the manufacturing plants open up and trucks pulling into the dealerships with the cars we’ve been waiting for. I think that the used-car market will fall at some point, but you never know; it’s so hard to predict what’s going to happen given the circumstances.”

Sullivan agreed.

“We’re not out of the woods yet,” he said. “And we’re incredibly grateful for being in as good shape as we are. When we looked at what the analysts were saying, that can really put a lump in your stomach. I’d like to say that we’re wildly optimistic, but we can’t be because we know there’s some choppy waters ahead.”

With that, he spoke for everyone in a business that has fared much better than most could have dreamed, but is still staring at some rather large question marks.

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

Coronavirus

Developments of Note

SSO

The SSO hasn’t been able to perform live since the pandemic arrived, but it has found ways to keep the music coming.

Susan Beaudry called it a ‘stop the presses’ moment — quite literally.

Indeed, the program book for an adjusted, and truncated, 2020-21 season for the Springfield Symphony Orchestra (SSO) was at Hadley Printers back in April, and the presses were set to roll. But at the very last moment, the order was canceled.

“The tenor of our industry was … ‘I wouldn’t say anything, I wouldn’t announce a season,’” said Beaudry, adding that, back then, as the number of cases in this state and around the country were soaring, industry groups were advising that it didn’t make sense to put a schedule down in black and white. And it still doesn’t.

“When you’re selling, which is what we’re doing when we announce a season, it’s very difficult in this climate,” she told BusinessWest. “People are afraid, still, to make a commitment — they’re not sure they want to gather in large groups, or they’re not sure what their financial situation is going to be. They’re not going to pre-buy for a concert that may be months away; we just felt it was an awful lot to ask our patrons and the community to make that kind of commitment.”

This episode captures, in poignant fashion, the state of limbo in which the SSO, and most all other institutions of its kind, now resides.

In short, the future is unknown, and when it comes to live performances before real audiences — the absolute lifeblood of these orchestras — it comes down to a waiting game. A wait for a vaccine, most probably, or perhaps an effective treatment for the virus. Something that will prompt the governor of the state to give the green light for phase 4 of his reopening plan.

“We’re listening and waiting,” Beaudry said. “We’re not planning based on our needs or our desires; we’re just listening. And when it’s the right time, we have a season ready to rock and roll. We may have to move some dates around, we may have to move some soloists around … but we know what we’re doing when the time comes.”

“People are afraid, still, to make a commitment — they’re not sure they want to gather in large groups, or they’re not sure what their financial situation is going to be.”

Beaudry stressed that she and others at the SSO are not simply waiting. Far from it.

In fact, she said she’s probably working harder and longer than she would during a typical season, largely because of an even longer to-do list.

It includes providing music to an audience — not the typical audience and not in the typical way; the SSO is now offering the HomeGrown Series, a weekly (Wednesday) webcast featuring a performance, demonstration, or lecture. It also includes fundraising, creating a fund to pay musicians sidelined by the pandemic, planning — as much as that assignment can be carried out in the COVID era — and working ever harder to create ways to broaden the orchestra’s audience.

Indeed, those at the SSO were well aware, long before anyone had ever heard the term COVID-19, that it needed to expand its base of patrons and supporters, said Beaudry, adding that the pandemic has perhaps brought a greater sense of urgency to this work.

“What we’re not doing is waiting,” she explained. “We’re fully engaged, and we’re working very, very hard. We still have to raise money, we still have to market our brand, we have to keep our musicians in front of our patrons, we have budgetary issues, a strategic plan to undertake … I’m working harder and longer hours than ever, but it’s exciting, fun, and rewarding work.”

As BusinessWest continues its extensive coverage of the pandemic and its broad impact on the region and its business community, we take an in-depth look at the SSO and how it intends to not just weather the storm but use the time and this extreme challenge to examine how to change and become a stronger institution moving forward.

Working in Concert

As she and others at the SSO packed up their computers and whatever else they might need in mid-March and left the orchestra’s offices in downtown Springfield to work at home, the expectation was that it would be for just a few weeks, said Beaudry, adding that this was roughly the same mindset taken with regard to shelving events on the schedule.

Indeed, even before state and federal shutdown orders were put if effect, orchestras, knowing that their audiences are dominated by seniors, began postponing or canceling events — a few weeks or a month at a time.

“We were halfway through March, and we said, ‘let’s just cancel the rest of March,’” she explained, noting that there were several events impacted, from a show at Symphony Hall to a chamber-music performance at Twin Hills Country Club in Longmeadow. “The board agreed — ‘it’s prudent, it’s the right thing to do … let’s not worry about April yet.’”

Soon, though, those at the SSO had a lot more to worry about than just April. As the full scope of the pandemic became clear, the rest of the season was canceled — and soon it also became apparent that the new season, which traditionally starts in September, was now a huge question mark.

Susan Beaudry

Susan Beaudry says that, while waiting for the green light to start its new season, the SSO is busy with everything from fundraising to building its brand to undertaking a strategic plan.

Which takes us back to that order to stop the presses. The program book that was set to roll detailed a truncated schedule that would start with the popular Holiday Pops performance and include four or five other events, said Beaudry.

Now, as noted, even that shorter, simpler schedule is very much in doubt — but ready to go when and if the word — in whatever form it takes — is given.

In the meantime, there is much more than waiting to do — starting with the HomeGrown series, which started back in April with Maestro Kevin Rhodes performing some Brahms on the piano. Over the ensuing weeks, the program has presented a variety of short programs featuring individual artists and even the entire oboe section.

“It’s been very successful, and we’ve received some very positive feedback,” Beaudry said. “It redirects people to a less stress-filled subject and a little levity, a little beauty. As we’ve always said, the healing power of music is very real, and the longer this pandemic lingers, the more that rings true.”

But to provide that healing power, the orchestra must survive what will almost certainly be its most difficult financial test — although it has weathered many over the years, including recessions and even world wars. This one is different, because there are so many unknowns, said Beaudry, adding that the pandemic has already forced the orchestra to furlough some staff and reduce hours for those who remain; she personally volunteered to take a 30% pay cut.

“We’ve basically lost a season,” she said, referring to the second half of the 2019-20 season and the first half of the upcoming season — at least. “We have no box-office sales right now, and we still have expenses.”

A Paycheck Protection Program loan helped keep staffers employed for several months, but those funds ran out, she went on, forcing the furloughs that were announced several weeks ago.

Moving forward, and with no program book for the upcoming season and no concerts to sponsor at the moment, the SSO is looking for different ways to provide value for its sponsors, and for those sponsors to provide the continued support needed to propel the orchestra to the proverbial other side of the pandemic.

“What we’re hoping is that we can turn sponsorship into a sustainability partnership,” she explained, “where these sponsors are going to philanthropically help us get over the hump so that we’re solvent on the other side and ready to take our place in the community and on stage when this whole thing is done. And the only way we do that successfully is with the full support of the community around us.”

While sustainability is now the most critical issue, a related need — to change and broaden the audience base — takes on even more importance in this era of COVID-19.

“We need to remind ourselves that not everyone is going to get dressed up on a Saturday night and drive to downtown Springfield from wherever and sit for two or three hours through a concert,” she explained. “It’s a commitment to come, so we need to figure out what people want to come to and how we can morph — not that we’re going to change our mission; we’re a classical music organization, and we intend to remain that.

“There are lots of considerations for us to make what we do a better product,” she went on, adding that, in some ways, the pandemic is amplifying the need for change and perhaps accelerating the process. Meanwhile, it is also helping to move the SSO in directions it knew it needed to move, such as virtual offerings, like HomeGrown.

“What COVID did was prompt us to ask, ‘what can we do virtually — how can we reach bigger audiences with a stronger reach electronically and virtually?’” she told BusinessWest. “That is a new wave of performances. We’re a live-performance organization; that’s really how we’ve focused — how do we get people to Symphony Hall? But if we can figure out how to best use livestreaming, who can we reach? What does that do for our education programs and our performances, or even the snowbirds who are gone for half our season?”

On a Final Note…

“This music is not in the notes, but in the silence between.”

That’s a quote from Mozart, and it now graces the SSO’s home page in large, bold type.

Not nearly as large and bold as the words “When the Orchestra Returns, Your Seat Will be Waiting.”

That’s a confident pronouncement in itself, with emphasis on the word ‘when.’

“We’ve been around for 76 years, and we’ve been through wars and other disasters, and we’ll get through this, too,” Beaudry said in conclusion. “We’re here to serve; we’re mission-driven. That’s the priority, and we’ll be ready.”

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

Coronavirus Special Coverage

Finding Meaning

Kay Simpson

Kay Simpson says the top priority before reopening Springfield Museums was making sure both visitors and staff would be safe.

“Kissing Through a Curtain” is an exhibit of 10 contemporary artists, dealing with communicating and translating across borders, how people interact, and the meaning behind words. It was hung at the Massachusetts Museum of Contemporary Art (MASS MoCA) in March, a few days before the museum closed due to COVID-19 — and there it has hung, dormant, ever since.

“The curator of that exhibit recently changed the introductory text to note that the questions the exhibit asks feel even more urgent now than they did three or four months ago when the exhibit was originally scheduled to open,” said Jodi Joseph, the museum’s director of Communications.

Visitors have agreed, she added, citing a conversation she had with a family of regulars from Boston the week museums were allowed to reopen to the public.

“Heading out, the mom in the group said, ‘oh, gosh, it has so much more meaning now,’” Joseph told BusinessWest. “That’s truly contemporary art. It reflects our time and what we’re going through.”

What museums have been going through is nothing to celebrate. Shutting down for almost four months is a financial strain for any cultural attraction, no matter how large or small.

“For many smaller museums, the financial impact has really been catastrophic,” said Kay Simpson, president of the Springfield Museums, adding that her organization was fortunate to receive not only a Paycheck Protection Program (PPP) loan, but generous contributions from a private donor and a foundation to help get through the past four months.

“One of the things people loved is all the interactive exhibits we provided, both permanent and traveling. Of course, now, we’ve had to be very careful about that.”

“It was an agonizing decision to shut down. At the beginning, we thought it would be for three weeks, and we’d be able to reopen,” she said, adding that conversations with other museums, followed by Gov. Charlie Baker’s shutdown order in late March, made the actual picture much clearer.

“It was really hard. It has just been an experience like no other,” she said. But thanks in part to the PPP loan and those donations, “we were able to sustain our operation through the closure. And now we’re reopening, but it’s on a limited basis. We’re very, very concerned about making sure this is a safe environment for our employees and our volunteers, as well as our visitors.”

It’s important they feel safe and return, Simpson added, if only because of what this set of museums means to the city and region.

“They’re unique and can’t be replicated at other settings — it’s an incredible complex that has served the city of Springfield for more than 160 years and is constantly evolving,” she said. “It attracts people of all ages and all backgrounds, engaging in learning experiences alongside each other — it’s a place where people come together, and it’s joyful and also educational.”

And, at long last, open to visitors.

Safety First

Not that it was easy getting to that point, of course. Museums across Massachusetts had to adhere to very specific guidelines outlined in phase 3 of Baker’s economic reopening plan, as well as their own sense of what visitors needed to feel comfortable enough to return.

Both Simpson and Joseph outlined measures at their facilities ranging from signs reminding people to wear masks, wash their hands, and stay six feet apart to plexiglass barriers and one-way directions at certain areas.

“One of the things people loved is all the interactive exhibits we provided, both permanent and traveling. Of course, now, we’ve had to be very careful about that,” Simpson said, noting that one nod to the new reality is the Yop, a Dr. Seuss character but also a new cell-phone app packed with maps, scavenger hunts, and self-guided tours that lend some interactivity to the museums in a safe way.

“We anticipate families will be among first visitors, and older adults will follow once they feel more comfortable,” she added, noting, of course, that what we know about COVID-19 has evolved, and is no longer recognized as dangerous only to older people.

MASS MoCA

Jodi Joseph says the wide spaces at MASS MoCA make physical distancing easier than at many places where people gather.

“We took COVID-19 very seriously, and we’ve engaged in months of planning,” Simpson said. “Even though we were closed, our staff worked very hard behind the scenes. We had staff talking to other museums, sharing best practices, attending webinars and conference calls, reading CDC guidelines — all to understand how we can safeguard our environment. It’s not like a classroom setting; it’s not like a retail setting — it’s a very different set of physical environments that we needed to think about very carefully.”

In addition to the basic rules around masks and distancing, MASS MoCA visitors who experience fever-like symptoms while at the museum are asked to self-identify to staff, and to enable contact tracing, should that be necessary, all ticket buyers are required to provide contact information and names of everyone in the party — both ways to prevent isolated infections from becoming community problems.

That said, the galleries themselves are massive — “we measure our gallery space by the acre here,” Joseph said — but high-traffic areas like stairwells are now one-directional, the entrance and exit have been separated, and the admissions desk has moved outside, accepting no more than 75 timed tickets every half-hour to keep crowds at state-mandated levels.

The museum, at one point, was considering five different scheduling plans for those galleries, which were gradually whittled down to one plan as the reopening date became more crystallized. Joseph credited state Sen. Adam Hinds and Jonathan Butler, president and CEO of 1Berkshire, for keeping the museum abreast of what was happening at the state level.

“As guidance about the hospitality and tourism sectors started to come down in late spring, we had a pretty good sense of when we’d be open, and we were able to come up with an exhibition calendar that made sense,” she explained.

“We learned lessons from the closure; we came to understand we need this online presence, and it needs to be developed on a parallel track with our on-site experiences.”

Like many museums, MASS MoCA has a long exhibition cycle that’s planned out well in advance, so most installations were ready to go this month. Meanwhile, the museum staged its first concert last week, for an audience limited to 100 — including staff — in a space that can typically pack in 4,000.

For the region’s live-music scene, it’s a welcome start. MASS MoCA alone usually hosts performing-arts events 40 weekends per year, and about half its resources go toward supporting the performing arts, mostly emerging artists.

In short, it’s tough when everything shuts down.

“MASS MoCA is a landlord — we have between 30 and 40 tenants on our 16-acre, 28-building former factory campus,” she noted, and a core group of employees remained on site to manage them, but also reach out virtually with daily ‘art moments’ — “like a greatest hits of MASS MoCA, some fan-favorite exhibitions. We wanted to remind people how great it would feel to be back here, walking these halls, reflecting in the galleries, taking in performances on our stages all across campus.”

It was in many ways “an excruciating few months,” she added, yet the museum staff was inspired at times, too.

“Visitors kept in touch not just with donations, but with deeply felt personal messages telling us how much MASS MoCA means to them, or sharing landmark memories from their own lives that have taken place within these walls,” she told BusinessWest. “As our hearts were aching from being closed and dealing with all the daily troubles of the world, we were also reassured by all the gratitude and appreciation folks were showing the institution, even though we weren’t able to welcome them inside.”

That said, Joseph was thrilled to see more than 1,000 people arrive on opening weekend. “Everyone who showed up said things like ‘thank you, I’m so glad you finally opened’ and ‘I’ve been dying to get back here.’”

Virtual Lessons

Springfield Museums stayed connected to fans as well by bolstering its virtual museum offerings online, Simpson said, from online classes to video demonstrations of collections and exhibitions, to staff videos showing parents how to do activities with their kids at home.

“We learned lessons from the closure; we came to understand we need this online presence, and it needs to be developed on a parallel track with our on-site experiences. So there is innovation that has come out of this,” Simpson said. “Out of something that no one wanted came positive results that can help shape what we do in the future and help us be better.”

That said, she was quick to add that “we strongly believe having people come down to the museums and engage in on-site experiences is really what we do well, and it’s our greatest contribution to our community and people who come to us from all over the region — and across the country and all over the world.”

She’s confident they will come from afar again, though it might take some time. “We might need a vaccine or successful treatments before people feel really confident about being together in the way they were before the pandemic.”

Joseph knows they’ll return, too, whether it’s to see art, like “Kissing Through a Curtain,” that shines a light on today’s world, or, conversely, to get away from reality, especially when that reality has been living in isolation for months on end.

“We want our institution to be a place of respite and a place where people can reflect on their shared experiences — and a place to escape, if that’s what they need. Leave the cares of the world behind and take a moment to be with art. That was our great hope when we reopened the doors.”

Joseph Bednar can be reached at [email protected]

Coronavirus Special Coverage

Solid Proof

Mike Quinlan

Mike Quinlan says the pandemic has ratcheted up online orders and curbside pickup, while generating an increase in overall consumption of alcohol.

Some are calling it the ‘drinking at home’ phenomenon — a reference to how people who can’t go to bars, nightclubs, or (until recently) casinos have been doing all or most of their imbibing at their residence instead.

Others are calling it the ‘drinking while working at home’ phenomenon, and that’s another story, one that has a number of employers understandably concerned.

Whatever it’s called, it’s a fact that people are not going out to drink nearly as much as they did BC — before COVID. And they’re drinking more, by most all accounts — according to a Morning Consult poll of 2,200 U.S. adults conducted in the spring, 16% of all adults said they were drinking more during the pandemic, with higher rates among younger adults — and for reasons ranging from coping with all the additional stress from the pandemic to not being in the office for eight or nine hours a day, to being able to stay up later on ‘school nights’ because they don’t have to dress for or commute to work in the morning.

All this has created opportunities for some area business owners, especially liquor-store owners — always deemed essential by the governor — who have seen sales volumes rise (in some cases dramatically) and a number of trends emerge.

That list includes everything from more bulk purchases to buying less-expensive items to keep overall spending down; from ordering online to getting items delivered or picking them up at curbside.

“April, May, and June were just … crazy,” recalled Sean Barry, owner of Four Seasons Package Store in Hadley. “It was just constant — the phone ringing off the hook some days, and you never knew when your busy days would be.”

Mike Quinlan, fine wines manager at Table & Vine in West Springfield, agreed. He said overall business volume has increased, as have visits to the store, but what has really ratcheted up has been online ordering and curbside pickup. The company has always featured the former — it’s been especially popular with wine buyers — but not the latter until the pandemic created a huge need for it.

“April, May, and June were just … crazy. It was just constant — the phone ringing off the hook some days, and you never knew when your busy days would be.”

“The impact on our business for online orders went up dramatically — it was a huge increase in the number of orders we were getting,” he said last week, noting that, while it has tapered off lately as restaurants have reopened, recent holidays, such as the Fourth of July, saw huge volume, and orders continue to flow in. “There’s a stack of orders for us to pick today, and then we keep up with it throughout the day.”

For others, this trend, which would appear to have some staying power — because, in this state, bars won’t open until there’s a vaccine, and in others where they’ve opened, they’re closing down again — is simply shifting business from one type of client to another.

Indeed, Paul Kozub, founder of Hadley-based V-One Vodka, said that, while his sales to liquor stores are certainly up — 30% to 40% over last year, by his estimation — sales to restaurants and bars are way down. And the scale is not exactly balanced because the latter has traditionally been the source of more business than the former, especially at certain times of the year, like spring, when COVID-19 shut most everything down.

Paul Kozub

Paul Kozub says that, while the pandemic has certainly increased sales of his vodka in liquor stores, that hasn’t made up for the losses he’s incurred at bars, restaurants, and events.

“In March and April, I lost 50% of my business because I do so much in bars and restaurants during those months, while I do a lot more in liquor stores in November in December, so that was quite a shock,” Kozub said. “The package stores are up, but that certainly doesn’t make up for what we’ve lost in those bars and restaurants.”

Overall, as with most sectors of the economy, the pandemic has created some opportunities for those making and selling spirits, and also eliminated others. For this issue, we take a look at how the numbers provide some hard proof — yes, that’s an industry term — of how buying and consumption habits have changed.

Case in Point

Barry, like many liquor-store owners, reduced his hours early in the spring and closed earlier at night. There were many reasons for this, he said, listing fewer people being on the roads, the fact that almost all surrounding stores were closed, and a desire to limit the risk of exposure to customers and employees alike.

But there was also what he called simply the “fatigue factor.”

“My staff was just overworked, so we needed to cut back,” he explained, noting that, while things have settled down somewhat since then, with restaurants now open, many people are still wary about going to such eateries, and in the meantime, large numbers of people continue to entertain and, yes, work from home.

Which means they’re buying more at the liquor stores. And their buying habits are changing in all kinds of ways, said Barry and Quinlan, noting that in-person visits are still popular, but curbside is flourishing as an option, and delivery, offered by some but not all, has certainly gained significant traction as well.

And while business is up generally, there have been periods of especially heavy volume, including some holidays that have historically been dine-out occasions but are now, like most things, stay-at-home affairs.

“When Mother’s Day came, and Father’s Day … those are occasions where a lot of people go out to a brunch or something like that — but not this year,” Quinlan said. “And so we saw our business jump significantly during those weeks when people would be having meals at home instead.”

Barry noted that, while it’s logical to assume that the closing of the five colleges located near his store in the middle of the spring semester would certainly have impacted his bottom line, he said that’s not really the case.

That’s because the vast majority of students are underage, he noted, and also because his store, unlike some in that area, does not directly market to the college crowd.

But the crowd it does cater to is definitely buying more these days, adding that he’s seen several trends develop. One is that many people — meaning those who can — are buying in bulk, on the theory being that, as with trips to the supermarket, many are trying to make as few as possible.

“What’s of note to us is that, in the wine department, the average price of a bottle that we’re selling has gone down a little bit. People who would drink a bottle or two of wine a week were now drinking three or four bottles a week, so they’re spending less on those bottles.”

So they’re coming less often, and they’re also buying in larger quantities, which is better for them than it is for the liquor-store owner.

“Sales are up, customer counts are pretty flat, and overall, net profit is slightly down,” Barry said. “That’s because everyone is buying bulk items and taking advantage of case discounts and all that stuff.”

Quinlan concurred, to a point. He noted that, while buying the large, economy sizes, or full cases of products, is less profitable for the store, Table & Vine — and other stores, he presumes — have been able to sell more in fewer hours, thus yielding greater overall productivity and profitability.

But while consumption of alcohol is increasing — statistics nationally confirm that — overall spending in individual households may not be. People are buying in bulk, as noted, but they’re also buying less-expensive items in some cases.

“What’s of note to us is that, in the wine department, the average price of a bottle that we’re selling has gone down a little bit,” Quinlan said. “People who would drink a bottle or two of wine a week were now drinking three or four bottles a week, so they’re spending less on those bottles; the number of bottles we’re moving has increased significantly.”

Mixed Results

As for what people are buying … it’s generally across the board, said Barry, noting that wine and vodka probably represent the biggest increases.

Speaking of vodka, Kozub, while referencing the shifts in consumption and buying and some changes at his company as it expands nationally, said the pandemic has certainly helped his business in some ways — but definitely hurt it in others.

Indeed, while he’s done much better with liquor-store sales — in large part because the company is now working with a distributor, which has opened a number of new doors — he’s suffered greatly from not having bars, restaurants, and other gathering spots — from the Hadley American Legion to the South Deerfield Polish Club; from MGM Springfield to the Big E — open for business.

And there are other missed opportunities as well.

“We were going to be the official vodka of the Pro Football Hall of Fame,” said Kozub, noting the company’s current push into Ohio, where that shrine is located (in Canton). “And we were going to sell a lot at the induction ceremony and Hall of Fame Game, but that just got called off.”

As for his liquor-store business, he’s been helped by the work-from-home and stay-at-home trends, and also by ‘Zoom mixology’ sessions, as he called them, Zoom happy hours, and other vehicles to educate the public, bring them together (online, at least), and share experiences somewhat like being in their favorite bar.

Meanwhile, as noted, the distributor he’s hired has certainly reduced the profitability of each bottle he sells in his liquor store, but it has greatly increased volume.

“Without the change to a distributor, we would be down 40% overall for the year,” Kozub said, emphasizing, again, just how much he’s lost through restrictions on people gathering in large numbers or confined spaces.

And this ongoing trend — and even taking steps backward in some states, including Florida, Texas, and others — is slowing V-One’s efforts to go national.

“We’re going to do Ohio and Michigan next, but we’re going to wait a little bit for Florida, Texas, and California,” he said, adding that those states, among the current hot spots, are closing many of the bars and restaurants that were open just a few weeks ago. “The timing of us going national is good in some ways, but tough in others.”

Meanwhile, in the current climate, getting into new liquor stores and expanding that footprint, which is among Kozub’s many goals, is somewhat of a challenge.

“The liquor stores are so busy that they’re not necessarily excited about bringing in new products right now,” he explained. “Because they’re selling everything they have, they’re selling a lot of the staples — the brands people know.”

Beer with Us

This is yet another emerging trend at a time when there have been many changes when it comes to what people are buying, when, where, how, and in what quantities.

The pandemic has certainly changed the landscape in so many business sectors and aspects of society — and alcohol is just one of them.

For some businesses, this will be a vintage year — another industry term — while for others, like Kozub, it will be a mix of new opportunities and lost opportunities, with the former hopefully outweighing the latter.

And, as with those other sectors, it’s a matter of waiting and seeing what happens.

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

Coronavirus Special Coverage

Coping with a Lost Year

Gene Cassidy

Gene Cassidy says the Eastern States Exposition is much like the farmers it helps promote; one lost season can spell disaster.

As he talked with BusinessWest about the cancellation of this year’s Big E and how the Eastern States Exposition (ESE) will respond to that huge loss of revenue, Gene Cassidy stopped and pointed to a picture at the opposite end of the company’s large conference room.

“That’s J. Loring Brooks, son of Joshua L. Brooks, founder of the Eastern States Exposition,” said Cassidy, president and CEO of ESE. “He was the Big E’s chief development officer. When the Eastern States had rainy fairs or fairs where, for one reason or another, we didn’t make any money, he would get on the phone and fundraise; when we had difficult times, he would find the funding to make ends meet.”

J. Loring Brooks died in 1984, Cassidy went on, and it’s been a long time since the fair has needed to try to raise money in that fashion — and it would be difficult do it that way now. “That’s not an aircraft carrier you can turn on a dime,” he noted, adding quickly that he did hire a development officer last year, and is looking into various strategies to perhaps do some fundraising.

Action of various kinds — from a development campaign to borrowing to discovering new revenue streams — is needed because 2020 has been the rainiest of years — figuratively, if not literally — in the fair’s 102-year history, and the assignment of making ends meet, as he put, is going to be a very stern challenge.

“We’re not unlike the farmer — if he loses a season, he can go broke,” said Cassidy, who quickly went from that analogy to another one. “I cavalierly refer to the Big E as the church bazaar for this nonprofit; if you don’t have your annual fundraiser, how can you execute on your mission?”

The Big E, he noted — originally known as the Eastern States Industrial and Agricultural Exposition — was created to be that church bazaar, the method for raising money needed to support a mission of promoting agriculture.

Thus, the COVID-19 pandemic has done more than close the fair for the first time since World War II. It has put the Eastern States Exposition on precarious financial ground; put plans for rehabbing and modernizing some of the buildings on the grounds, especially the obsolete Coliseum, on ice; left large questions marks about how the ESE is going to respond to the agricultural community’s ongoing need for a platform; and even raised some doubts about the fate of the fair in 2021.

“We’re not unlike the farmer — if he loses a season, he can go broke. I cavalierly refer to the Big E as the church bazaar for this nonprofit; if you don’t have your annual fundraiser, how can you execute on your mission?’”

But while those at the Big E are certainly moving full steam ahead with planning for next year’s fair, they must also contend with a massive hole in the budget — the Big E accounts for 85% of the yearly revenue, and much of the remaining 15% (all the many types of shows on the books after mid-March) has been wiped off the calendar as well.

Grounds for Change

That makes this year decidedly different, said Cassidy, noting that, in a typical year, his staff would be on what amounts to cruise control as it enters the final six or seven weeks of lead-up to the Big E. This year, these employees are searching imaginatively for ways to generate revenue and close the budget gap.

“We’re in a phase now of trying to discover how we can do smaller types of events that can generate some resources in order for us to sustain ourselves through to next season,” he explained, noting that the fair, despite its wealth of space, buildings, parking, and amenities, is still limited in what it can do. Put another way, it’s limited by what it can’t do, according the governor’s reopening plan — bring large numbers of people together in close proximity to one another.

J. Loring Brooks

When he was the Big E’s chief development officer, J. Loring Brooks would get on the phone and raise money when the fair had bad years, usually as a result of weather.

Options, most of which involve keeping visitors in their cars and taking full advantage of the Big E’s sprawling, 59-acre main parking lot, include everything from a drive-in theater — a cost-benefit analysis is currently underway — to concerts to events like the recent ‘Taste of the Big E,’ a gathering that was eye-opening in a number of ways.
Indeed, the Taste, which involved visitors driving onto the Big E property and then staying in their cars to sample some of the food that would have been offered at this year’s fair, drew far more people than organizers were expecting, said Cassidy, adding that traffic was backed up the full length of Memorial Avenue. “People drove for hours to get here, and then they spent hours waiting in line to get in.”

Ultimately, the Taste helped convince Big E organizers that they simply couldn’t control the turnout for this year’s fair, said Cassidy, adding that the event showed that, if you open for the doors for something people want, they will come.

“When we saw the response to the food show, we knew there was no way to control the number of people on the fairgrounds for the Big E,” he explained. “And knowing that really helped make the decision that staging the fair would not in the best interests of the people who came.”

But the Taste also provided ample evidence that different types of revenue-generating events can possibly be staged at the fairgrounds during the pandemic. These won’t generate anything approaching the income the fair did, but they may help limit the flow of red ink in a year no one could have comprehended just five months ago.

“We’re in a phase now of trying to discover how we can do smaller types of events that can generate some resources in order for us to sustain ourselves through to next season.”

A drive-in theater is among them, said Cassidy, noting that, decades ago, there was one just a half-mile or so down Memorial Avenue, and other one on Riverdale Street. Drive-ins have staged something approaching a comeback during the pandemic, but the startup costs are considerable — $90,000 to buy the camera to project the movies, for example.

“We’ve done a lot of due diligence to discover if there’s a way we could actually turn a profit,” he noted. “That’s one of many things that are on the table.”

Another is the possibility of bringing carnival rides — which are not discussed anywhere in the reopening plan, according to Cassidy — to the fairgrounds. Others include finding new uses for the state buildings (or the grounds outside them), and staging concerts where attendees stay in their cars.

“There are some challenges to putting these on, and some limitations, but they’re a viable option for us,” he noted. “People want to get out to events like this, and a lot of entertainers are dying to work; they’ve lost a lot of opportunities, and they need to work.”

Daunting Challenge

While optimistic that some revenue streams can be created in the midst of the pandemic, Cassidy is also realistic and knows that, collectively, these efforts will generate only a fraction of what a solid Big E would.

“My goal is to get this organization through this very difficult time and run a Big E in 2021 that brings people together again,” said Cassidy, adding, again, that this will be a stern challenge not unlike that faced by a farmer who loses a year’s worth of crops.

Or a small fundraiser that loses its annual bazaar.

Those analogies might not seem appropriate for an organization, and an event, that brings 1.5 million people to the region every year. But for Cassidy, they work, and they illustrate just what he and his staff are up against.

—George O’Brien

Coronavirus Sections Special Coverage

Improved State

By George O’Brien

In many respects, Dr. Andrew Artenstein says, the COVID-19 virus acts like water in the home in that, if there are leaks, it can go where you don’t necessarily want it to go and cause major problems.

Dr. Andrew Artenstein

Dr. Andrew Artenstein

“Water will always find a path,” Artenstein, chief physician executive and chief academic officer at Baystate Health, told BusinessWest. “But if you block off all the paths, you have a chance; it’s the same with the virus.”

With that, he worked to explain why it is that Massachusetts, more than most of the other 50 states at this particular moment in time, is seeing the number of hospitalizations and deaths stemming from the virus decline sharply. In short, and in his view, the residents of the Commonwealth are essentially, and somewhat effectively, blocking off the paths the virus might take.

“We live in a society where there’s free mobility — that’s one of the things we love about our society. But it’s also one of the things that puts us at risk when there’s a transmissible agent rooted in this society,” he explained. “And this one is clearly here; it’s clearly transmitted in our community. It has not gone away; it’s just that, if viruses don’t get transmitted from person to person … if the virus has nowhere to go, it puts a wall from that root of transmission. You start to block off transmission paths.”

This was Artenstein’s way of explaining why, as one looks at a map of the country charting cases, hospitalizations, and deaths from the pandemic, Massachusetts is colored or tan or pink, while so many other states, especially in the South and Southwest, are dark shades of red, indicating they are hot spots.

Dr. Robert Roose

Robert Roose, chief medical officer at Mercy Medical Center, gave essentially the same account.

“Massachusetts, along with a few of the other states here in New England, like Connecticut, New Hampshire, and a few others, seem to be solid, if nt shining, examples of how a state encompassing multiple different communities can effectively slow down the rate of transmission of the coronavirus,” he said. “More than 40 other states are seeing significant increases in numbers of new infections, while here, over the past several weeks, we have not seen that increase; rather, we’ve seen a plateauing at a very low level.”

He punctuated those comments with some statistics from his facility. Indeed, he noted that hospitalizations stemming from COVID-19, which numbered in the 50s daily on average in April, the height of the surge in this region, were down in the 20s in May, then the single digits in June. Starting in early July, there were several days when there were no hospitalizations.

Clearly, the state is doing something right, or several things right, when it comes to blocking paths for the virus, and we’ll get to those. But this begs a number of questions — especially, ‘is this sustainable?’

The quick answer, said Roose and Artenstein, is ‘yes.’ But there are a number of caveats, especially as more segments of the economy reopen in more cities, including Boston, and as the new school year is poised to begin. In their view, the Commonwealth has acted prudently in not opening too much of the economy too quickly. Staying that course is essential, they said, adding that it appears the state is committed to the slow, steady, and safe method.

Meanwhile, travel is another key factor in this equation, both people from this state traveling to others and people from other states coming here — actions that create paths for the virus, rather than block them.

“Massachusetts and other states now doing well have been cautious in giving guidance to residents about limitations on travel and quarantining of individuals who have come from other states where there are increasing numbers of infections,” Roose said. “To me, that is likely to be the most significant factor going forward, because of the rates of infection in other parts of the country; interstate travel represents one of our most significant risks in terms of keeping our rates of transmission is this local community low.”

But the biggest factor might be fatigue.

“It’s exhausting — for all of us; I’m not just talking about the healthcare side, I’m talking about life,” said Artenstein. “There are certain things that you just miss having as social human beings. But the longer you can sort of wait this out and stretch this out, the better off we’ll be.”

In other words, people can’t relax or think for a moment that maybe it’s time to start talking about the pandemic in the past tense.

As they talked about the state’s current status as a … let’s call it a cold spot for the virus, both Roose and Artenstein praised the Commonwealth’s approach to reopening, which has been described by both those supporting and criticizing it as slow and careful.

Pain Threshold

Artenstein had another word for it.

“It’s painful, because we all want to get back to a sense of normalcy,” he explained. “It’s exhausting that you can’t do what you like to do the way you used to do it, and eventually we will be able to. But this approach has paid dividends; you get used to a little bit of a new normal, but you also know that you’re moving toward something.”

Roose agreed.

“What I think Gov. Baker and the Executive Office of Health and Human Services have done very well is be cautious, rely very clearly and directly on the key data points, and move slowly but consistently through a phased reopening,” he explained. “In other states, governors had moved much more quickly, and we’re seeing the effects of that now; in many states, they’re seeing such significant increases that they’re moving backward and rolling back some aspects of their reopenings.

“It’s not to say that this same type of thing couldn’t happen here,” he added quickly. “But relying consistently on key data and reinforcing consistently the important public-health and safety strategies that we know are effective in reducing transmission — that has not wavered, and I think that has sent a very consistent and strong message to residents to continue to wear masks, be cautious with increasing your social circle, practice hand hygiene, and quarantine when you’re sick.”

As a result of the slow reopening plan and diligence with things like mask wearing, contact tracing, social distancing, and testing, the Commonwealth has effectively moved past the first wave of the pandemic — while other states have clearly not, said those we spoke with. It is now in what Artenstein called a “window,” where, he said, residents must be diligent about not backsliding when it comes to mask wearing, hand washing, keeping one’s distance, and other preventive measures, while also preparing for the second wave that most say is almost certain to come in the fall or winter.

“That’s just historically what pandemics do,” he explained. “They don’t all do that, but statistics will tell you that there will be at least a second wave if not more waves.”

What will those waves be like? It’s difficult to say at this point, said Roose and Artenstein, adding that a number of factors will dictate the level of infections and how well the healthcare community can respond to the next surge.

But in the meantime, and while still in this window, the state’s residents and business owners alike must continue to stay the course, the experts said.

“We still could do better in terms of how often people wear masks in pubic and follow the public-health recommendations,” said Roose, adding that state leadership must continue to reinforce those messages. “We know that when we give those recommendations and that guidance and it’s clear and connected to science, it helps, and it’s certainly important to be consistent about it, or people will have less inclination to follow them.”

Meanwhile, as the state proceeds with phase 3 of its reopening plan and eyes phase 4, testing will be another critical key to closing off paths the virus might take.

“I believe strongly that adequate capacity and widespread testing are critical for us to continue to move forward into phase 4 and into a state where the community is engaging as fully as it can,” Roose said. “That allows us to ensure that, if we do identify infections, we can mitigate the spread; widespread testing is really critical, and we’re not yet where we need to be, as state and as a country. We still could be doing more, and I think the ways we do testing will continue to get easier and more readily available, and that will help quite a bit.”

Artenstein agreed, but quickly noted that all the steps people have been taking — and hopefully will continue to take — only serve to slow or inhibit the spread of the virus. The virus is still there, and it will remain there until a vaccine is developed.

“You can temporarily shut down or limit transmission,” he said, “and then you have the chance for other things to kick in, such as therapies and better approaches to diagnosis and treatment. Those things take time, but they can get a chance to take root once you’ve already established those public-health principles.

“It’s pretty obvious that limiting public gatherings and staying the course has helped,” he went on, returning to the thought that, however painful and exhausting the last few months have been, the strategy moving forward for the state and all its residents has to be to continue to wait it out and, as he said, “stretch it out.”

Bottom Line

Turning the clock back 100 years, to the so-called Spanish flu, Artenstein said the second wave of that pandemic was more severe than the first in many parts of the country simply because communities eased off on restrictions and returned to what life was like before it struck.

“A lot has changed in 100 years — science, technology, people, etc.,” he told BusinessWest. “But one thing that hasn’t changed that much, in my opinion, is behavior. We may be able to further mitigate any future surge, just as we mitigated this surge, by adhering to public-health guidelines. If we can keep that up, and then get some help with testing, better contract tracing, better therapies, which will happen, and maybe a vaccine…”

He didn’t completely finish the thought and instead stressed that this ‘if’ is a very large one, and there are really no certainties when it comes to this strategy.

But the very best strategy at the moment, he stressed, is to string this out and close off those pathways the virus can take.

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

Coronavirus Special Coverage

For every business in Western Mass., there is a story about coping with the COVID-19 pandemic. Each one, as we’ve noted before, is different. But there are many common themes, especially the need to deal effectively — somehow — with those things that one can control, and cope — again, somehow — with the things one can’t control. And that latter list is, unfortunately, long and complicated. It includes everything from navigating the state’s rules (and short timelines) for reopening to losing large and important clients, like MGM Springfield, to not knowing what the future holds. Here are six more COVID stories.

 

Judy Puffer

Puffer’s Salon & Day Spa

Responding to COVID-19 has been hair-raising to say the least   Read More >>

 


 

White Lion Brewery

For this Springfield business, better times are on tap   Read More >>

 


 

Wilbraham Monson Academy

At this school, pandemic has been a real learning experience    Read More >>

 


 

Jerome’s Party Plus

Growing need for tents is helping company through a trying year   Read More >>

 


 

King Ward Bus Lines

Chicopee-based company is still trying to get out
of first gear   Read More >>

 


 

Park Cleaners

‘The place where COVID goes to die’ is still in recovery mode   Read More >>

 


 

Back on the Clock

COVID-19 era presents unique challenge for older workers   Read More >>

Coronavirus

Responding to COVID-19 Has Been Hair-raising to Say the Least

Judy Puffer

Judy Puffer, founder and owner of Puffer’s Salon & Day Spa in Westfield

Judy Puffer knows she’s ready for a vacation. What she doesn’t know is whether she’s going to get one any time soon.

With that, she speaks for the vast majority of business owners and managers coping with everything the COVID-19 pandemic is throwing at them. In short, shutting down the economy was anything but a break for most people in business, reopening was exhausting on many levels, and doing business now is … well, anything but business as usual or what life was like before any of us heard of that now infamous name followed by a number.

“I was working hard behind the scenes — probably harder than when we were open,” said Puffer, founder and owner of Puffer’s Salon & Day Spa in Westfield, who told BusinessWest that the past three and a half months have easily been her most trying in business. And while most all aspects of that business are now open again, getting here wasn’t easy, and challenges remain.

Replaying the tape from the past 100 days or so, she recounted challenges ranging from shortages of needed supplies and encounters with price gouging to lack of guidance from the state and federal governments regarding how and when reopening would occur, to clogged phone lines once the ‘open’ sign was back on the door.

Some of this she could see coming, like those busy phone lines, but most of it she couldn’t, and as she retells her story, one can sense the exhaustion, exasperation, and, yes, relief in her voice now that most of the really hard stuff is in the past tense. Or so she hopes.

Turning the clock back to March 23, Puffer said from the day the shutdown order was given, the focus turned to reopening. And there were challenges everywhere, including this state’s slow, cautious approach — which actually turned out to be a kind of blessing in disguise, although she didn’t use those exact words.

“It was obstacle after obstacle after obstacle just trying to get set up to open. Governor Baker did a great job with all this, but he gave us very little notice; he said, ‘OK, you can open, but you have to have these protocols in place.’ It was like setting up a whole new way to do business, and we weren’t given much time to do it.”

“One of the things that really helped me was being part of the Aveda Corporation,” she said, referring to the Minneapolis-based supplier of high-end health and beauty products that has affiliated with salons across the country. “The company immediately started owner calls, two a week that ran for an hour to an hour and a half; what they would do is get people from a variety of states on these webinars. That was huge because we were getting feedback from people who were opening in Georgia about the challenges they were facing; we were getting people from California who were still closed, talking about what they were doing to get open; we heard from people in Florida, Colorado, Minnesota, New York.

“All this really helped me,” she went on, “because there wasn’t really any guidance from this state from anyone. Getting that help from Aveda was huge because I could then take what these states were doing and put it into my culture and kind of be prepared.”

Elaborating, she referenced everything from shampooing customers — some states allowed it, while others didn’t — to blow-drying hair (again, some allowed it, others didn’t); from taking customers’ temperatures when they walked in the door to learning about a company that came up with plexiglass dividers on wheels to place between stylists’ stations.

The goal was to be as prepared as possible, and all those webinars certainly helped.

What also helped was some advice to think outside the box when it came to needed supplies, which she did after finding that items she ordered in March were simply not going to arrive. She managed to buy some alcohol for cleaning from another business in Westfield, spray bottles from another business owner, and a timely referral from an area dentist on where to procure thermometers in just a few days.

“It was obstacle after obstacle after obstacle just trying to get set up to open,” she recalled. “And we started the minute we closed. Governor Baker did a great job with all this, but he gave us very little notice; he said, ‘OK, you can open, but you have to have these protocols in place.’ It was like setting up a whole new way to do business, and we weren’t given much time to do it.”

The company reopened its salon the day after Memorial Day, with the salon aspects of the businesses opening a few weeks later, under the second stage of phase 2 — again, with very little time to prepare. Now, all but a few of the many services are available, with the rest, like the sauna, to come in phase 4.

Puffer says she’s managed because she was able to learn from others through those webinars and by anticipating what would come next so she could be ready for it.

It’s been a trying — and very tiring — experience. And that’s why she’s more than ready for the vacation she’s not likely to get any time soon. u

—George O’Brien

Coronavirus

For This Springfield Business, Better Times Are on Tap

Ray Berry

Ray Berry, seen here at the site of White Lion’s new facility in Tower Square, now under construction, says the pandemic impacted virtually every aspect of his business.

From the beginning of the pandemic, Ray Berry’s White Lion Brewery was deemed an essential business by the state’s governor.

That means it was allowed to remain open when many others had to close amid efforts to flatten the curve and relieve the tension on the region’s healthcare system.

But as any other venture on that large list can attest, ‘essential’ does not mean free of challenges, headaches, anxiety, and uncertainty about what might come next.

Indeed, there’s been plenty of all of those things for this Springfield-based company that was looking toward 2020 as a watershed year, and still is in at least some respects.

Especially with plans for a much-anticipated taproom and accompanying restaurant in Tower Square — specifically the former Spaghetti Freddy’s site — now moving forward again after a halt to most forms of construction during the spring.

“Pre-COVID, we were really ramping up and starting to fire on all cylinders relative to sales and construction — we were about to onboard another salesperson and were also looking to obtain another vehicle and perhaps another part-time person to deliver our product,” he told BusinessWest. “And then … the pandemic hit.”

And it hit hard, impacting the company from “front to back,” as Berry put it.

“Pre-COVID, we were really ramping up and starting to fire on all cylinders relative to sales and construction — we were about to onboard another salesperson and were also looking to obtain another vehicle and perhaps another part-time person to deliver our product. And then … the pandemic hit.”

By that he meant virtually every aspect of the business, from the closure of the hundreds of bars and restaurants (as well as MGM Springfield) that sold White Lion to a halting of construction work on the brewery; from the canceling of high-profile events where the brand had a presence, such as the Holyoke Road Race, to the suspension of the beer gardens the company has hosted in downtown Springfield and Westfield during the summer and fall months.

“It was just like a crash — it all happened at once within a 48-hour period when the state and federal governments stepped in and put restrictions in place,” he noted, adding that, as sales plummeted (only liquor stores, also deemed essential, remained as a distribution point), the company had to lay off some of its employees in stages and figure out how to manage with those who remained.

White Lion has been helped by assistance programs on a number of levels, from the federal Paycheck Protection Program to the local Prime the Pump initiative created by the Development Department in Springfield, said Berry, adding that this help, coupled with the remaining business from liquor stores, enabled the company to stay on its feet during those brutal spring months.

And as the state continues to reopen businesses, the outlook for White Lion continues to brighten. Restaurants have reopened across the region, and the state’s casinos have been given the green light to open their doors, although MGM Springfield has not given a specific date when it might do so. And work has resumed on the project in Tower Square, and Berry is projecting that his crew can be in and brewing beer by the end of this month.

“The taproom component is under construction now,” he went on, “and we hope that by mid-August, the taproom piece, as well the kitchen piece, will be complete, and that by the end of August or early September we can start welcoming people into the space.”

Meanwhile, White Lion has recalled most of its seven employees and expects to be “whole” in that regard by late July, he said.

Projecting beyond the next few months is difficult, but Berry believes the company will be able to open its beer gardens in late August or early September, noting that these ventures will be part of phase 3 of the state’s reopening plan.

Looking back — and ahead — Berry, echoing countless other business owners across every sector of the economy, said the pandemic has provided a stern test, one he believes his team is passing through determination and imagination.

“It’s been a challenge in every way you can imagine,” he told BusinessWest. “It’s just a predicament that we’re in, and we have to pivot and continue to find ways to remain resourceful and efficient for the benefit of the sustainability of the company.

“I always said that we’re all resilient as people,” he went on. “And there’s always going to be a light at the end of the tunnel. We don’t know how long that tunnel may be, but there will be a light, and we’re starting to see some of that that now.”

—George O’Brien

Coronavirus

At This School, Pandemic Has Been a Real Learning Experience

Brian Easler says Wilbraham Monson Academy

Brian Easler says Wilbraham Monson Academy was perhaps better prepared for the pandemic than some other institutions, but pivoting to online learning was still a stern challenge.

Brian Easler still recalls the name of the briefing staged by the Centers for Disease Control in Washington, D.C. more than a decade ago: “The Impending Pandemic.”

Actually, what he remembers even more was the subtitle to the program: “It’s Not a Matter of If, It’s a Matter of When.”

He took the content to heart, and because of that, he believes Wilbraham Monson Academy (WMA), which he serves as head of school, was in some ways better able to handle the arrival of COVID-19 in mid-March.

“We had prepared pretty well for something like this, actually,” he told BusinessWest. “That was a three-day workshop I attended in Washington led by some of the country’s leading epidemiologists. I came back to the school with a lot of good information on how to prepare.”

Elaborating, he said that, because of that warning, the school was well-stocked with what everyone knows now as PPE, and there were plans already in writing for several different scenarios depending on when in the school year the pandemic actually hit.

Such preparation certainly didn’t make the closing of the campus to all but a few international students who simply couldn’t get home, or the transition to remote learning, easy. But it probably made it easier, said Easler, comparing what has transpired over the past several months to a military operation — and he should know, having served in the Army Airborne Rangers.

“You’re getting swept up in something bigger than yourself, where there’s risk involved and a degree of planning,” he explained. “And the decision making — the emergency decision-making process — is much different. During normal times, a decision might be very difficult to make; during an emergency, that decision becomes very easy. We wouldn’t normally turn our school meeting space into a second dining hall — that would be a big decision during normal times. But under these conditions, it was an easy decision to make.”

“We had prepared pretty well for something like this, actually.”

Flashing back to March — and then further back to what he heard all those years ago — Easler said the pandemic did not hit quite like those experts projected it would.

“What tripped up us a little bit is that the CDC was anticipating a pandemic that would be fast-moving,” he explained. “We were prepared for three weeks; that was fine when it came to PPE because all the students went home. But it didn’t help us with transition to an online education program; we had to literally make that up on the fly during spring break.

“In the end, it’s a good thing it wasn’t a fast-moving pandemic, because fast-moving also means really deadly,” he went on. “We were planning for a three- or four-week event, as opposed to a 12-month event, which is more like what we’re looking at. But as a school we saw the signs early, and we paid attention to the right things and the right information. When the students were getting ready for spring break, we told them to bring their laptops and books home with them and to be prepared in case we were not able to return for classes.”

Overall, that transition to remote learning went smoothly, he went on, because of the tight, close-knit nature of the WMA community and the hard work and dedication of staff and students. And these elements are also facilitating efforts to plan for the fall semester, which will start at its traditional time in early September and feature a hybrid model that mixes in-class and remote learning.

“We can simultaneously run classes on campus for the faculty and students who can be on campus, while students and faculty and who cannot be on campus can still synchronistically participate in the same program,” he explained. “It’s fluid, it’s very flexible, and, quite honestly, it’s the future of education anyway. We wish it didn’t take an event like this to move us in this direction, but we’re happy to be moving in this direction — it’s good teaching.”

Looking ahead to the fall, Easler said enrollment, which is traditionally roughly 400 students, remains steady, and, overall, the school may see its numbers rise due to uncertainty among parents about just what the public-school environment might look like come late August or September.

“We’re seeing a little bit of an uptick in local interest,” Easler noted. “I’m speculating, but I think the public-school systems are going to face some significant challenges, and they don’t necessarily have the space resources that we do — we’re structured much like a small college campus with multiple buildings, lots of outdoor space, and a number of spaces that, even though they’re not used as classrooms, can be used as socially distanced classrooms; we have a lot of advantages over public schools.”

Whether this interest locally translates into a bump in enrollment remains to be seen. But what is already clear is that early and effective planning has paid off for this venerable institution.

And it was necessary because the planners of that program in Washington all those years ago were right; it was a question of when, not if, a pandemic would arrive.

—George O’Brien

Coronavirus

Growing Need for Tents Is Helping Company Through a Trying Year

Greg Jerome stands by one of the tents

Greg Jerome stands by one of the tents his company supplied to the High Street Clinic in Springfield, an example of how the pandemic has created some opportunities while robbing the company of many others.

Greg Jerome didn’t want to get into any specific revenue numbers, but he made it clear that the COVID-19 pandemic has made this a year to forget for his business, Westfield-based Jerome’s Party Plus.

But he also made it clear that, if not for certain aspects of the pandemic, the numbers would be even worse.

Indeed, for this venture, and others like it, tent rentals are a big part of the portfolio. And while the pandemic has wiped all kinds of tent-worthy events off the calendar — from weddings to graduation parties to town gatherings like ‘taste of’ events — it has also driven considerable need for this item, especially over the past several weeks as sectors of the economy and specific types of businesses began to reopen.

That list includes restaurants, summer camps, and even churches, said Jerome, president of this family-run business that has 200 tents in its inventory, noting that his crews have been kept busy putting up tents in recent weeks, and not so much taking them down, because this year, when a tent goes up, it stays up for a while —perhaps the whole summer and beyond.

“We have more than 8,000 chairs, 800 tables, stages, dishware, glassware, flatware, linen, and many other items that have all been collecting dust for three months now.”

“And that’s just one of the things that makes this year very different,” he told BusinessWest, noting that going back to March, when he first installed a tent for Baystate Health for COVID-19 testing, the company has been involved with some unique undertakings.

However, he made it clear that, while he’s renting out tents, there is still a good supply available in the warehouse. Meanwhile, he’s not renting out much of anything else.

“We have more than 8,000 chairs, 800 tables, stages, dishware, glassware, flatware, linen, and many other items that have all been collecting dust for three months now,” said Jerome, adding that, while there is hope that some of these items may soon get back into circulation, the picture was further clouded by the cancelation of the Big E for 2020.

“The Big E cancellation will be our greatest loss of revenue this year,” said Jerome, noting that the Eastern States Exposition is his biggest customer and the fair is by far his biggest single event. “The cancellation of the fair certainly took the wind out of our sails; we always get excited during the push to install 150 tents and 3,500 chairs.”

For now, Jerome said his company is trying to make the most of the sudden, and still-surging, need for tents as businesses and institutions search for ways to carry on during the pandemic — often by moving activities and services outdoors. And his large inventory, especially when it comes to the bigger models, has certainly helped in this regard.

New and certainly non-traditional tent clients include several restaurants, including Shortstop Bar & Grill in Westfield, Tucker’s in Southwick, Captain Jimmy’s in Agawam, and Masse’s in Chicopee, among many others, as well as Blessed Sacrament Church in Westfield, which held services outdoors for several weeks and still uses a tent for those uncomfortable with going inside. The company has already supplied tents for several nonprofits with summer day programs, including the Greater Westfield YMCA and a few Boys and Girls Clubs, as well as the West Springfield Parks & Recreation Department.

It has also provided tents and other items for a number of drive-in COVID-testing sites operated by Baystate Health, including facilities in Westfield, Ware, Greenfield, and three locations in Springfield. This work goes back to mid-March when the company was hired by Baystate Health to create what Jerome called “cubicles” inside the new triage facility erected just outside the emergency room.

Elaborating, he said the company provided the piping, and another vendor supplied corrugated boards that were attached to the framework to create 33 private spaces.

For the drive-in sites, the company created a model that was eventually used at all six locations, facilities that also included a greeters’ tent and a heated tent-within-a-tent with clear sides that served as a type of nurses’ station.

These intriguing projects have certainly helped, but those thousands of items gathering dust and not seeing the light of day are the bigger story.

And they explain why this is certainly a different kind of year, when the pandemic has generated some business, but taken away so much more.

—George O’Brien

Coronavirus

Chicopee-based Company Is Still Trying to Get Out of First Gear

Dennis King

Dennis King says the pandemic brought bus travel to a near standstill, impacting every type of customer in the company’s portfolio.

Dennis King says he’s experienced a number of subtle, but mostly not-so-subtle, cruelties stemming from the COVID-19 pandemic.

Starting with those low gas prices from a few months back and the fact that no one could really take advantage of them.

“Gas was $1.25 … and you had nowhere to go,” said King, president of Chicopee-based King Ward Bus Lines, who used that statement in reference to individuals and families — and just about every one of his customers.

Indeed, ‘nowhere to go’ applied — and still applies — to college and high-school sports teams, an important client base in the company’s portfolio. And to people seeking to visit one of the region’s casinos. And to groups heading to Red Sox games. And to people looking to go to a show in the Big Apple. And to classes going on school field trips.

All those sources of revenue dried up, seemingly overnight, for this family-owned business, said King, adding that the last bus left King Ward’s garages on March 14, and the company’s busiest time of the year was essentially wiped off the calendar.

“And our July is kind of on hold, because we don’t have any trips booked, unless something happens with the casinos,” he told BusinessWest, noting that, while the Connecticut gaming palaces are open, they are currently not accepting bus groups. The Bay State’s casinos are set to open early this month, but it isn’t known if they will accept bus groups.

As for the future … it is a giant question mark, he said, noting that, while the Red Sox may start playing again, it’s not known if there will be any fans in the stands. Meanwhile, Saratoga Raceway in New York and countless other venues that people travel to by bus are closed for the summer or the rest of the year. Meanwhile, no one really knows if there will be any high-school and college athletics this coming fall, or any school field trips.

“Gas was $1.25 … and you had nowhere to go.”

And then, there’s the Big E, another important source of revenue for the company. It’s been canceled for 2020, leaving another huge hole in the budget that will be difficult to fill .

Faced with idle buses, King said he laid off or furloughed all but a few of his employees back in the spring. He’s looking to bring some office staff and mechanics back on Aug. 1 and hopes things get busier come September.

“We’re banking on college athletics coming back,” he noted. “If there is a light at the end of the tunnel — and that’s if — it would be schools getting back in session.”

As for the casinos, and especially MGM, King Ward was given what was at the time (the summer of 2018) thought to be a game-changing contract to bring people to the casino from various destinations across the region. To say things haven’t worked out as planned would be an understatement, said King, noting that the service — subsidized by MGM at the start — was scaled back only six months after the casino opened in August 2018, and it eventually evolved into a door-to-door service using vans rather than buses, with those choosing this option getting credits for the gaming floor and lunch — what amounted to what King called “a free ride to the casino.”

“But it never really took off,” he said, adding quickly that the service does have the potential to grow, and, like many others, he’s watching and waiting to see if and when the casino will reopen.

There will be a lot of watching and waiting for this company, which, like so many others, is dependent on other businesses and institutions for its livelihood. The pandemic has impacted all of them, and, as noted earlier, the trickle-down, in this specific case, was much more like a torrent.

So much so that King was one of many within the bus industry who ventured to Washington, D.C. several weeks ago to lobby elected leaders for financial assistance for a sector he said is often overlooked within the larger transportation industry.

“I don’t expect to be busy again until Labor Day, unless something happens and the casinos start accepting buses,” he told BusinessWest, adding that ‘busy’ is certainly a relative term in 2020, and there are myriad factors that will determine when, and to what extent, the buses start rolling again.

Still optimistic, despite a gloomy year to date, King said people are calling and asking about service to the casinos.

“People are ready to get out — they’ve been cooped up for a long time,” he said, adding that he hopes there will soon be places to take people.

Gas certainly won’t be as cheap as it was back in March, but all things considered, that’s certainly one of the more subtle cruelties stemming from the pandemic.

—George O’Brien