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Coronavirus Special Coverage

Opinion

Going back to the early days of the pandemic, one of the overriding questions on the minds of many in this region, and especially its business community, was: will there be a Big E?

On Monday, we finally learned the answer: no.

In many ways, that verdict was not unexpected. Looking at the situation objectively, one had to wonder how organizers could possibly stage a fair that draws more than 100,000 people on a good day and keep not only these visitors safe, but also the workers, vendors, and area residents. It just didn’t seem doable, even to those who really, as in really, wanted the Big E to happen.

And that’s a large constituency, especially within the business community, where many different kinds of ventures benefit greatly from the 17-day fair and the 1.5 million people drawn to it annually. That list includes hotels, restaurants, tent-rental companies, transportation outfits, food vendors, breweries, and many, many more. These businesses have already lost so much to the pandemic, and now they’ve suffered perhaps the biggest loss of all.

Indeed, the year-long (at least) challenge of surviving the pandemic just became a little sterner for all kinds of businesses within the 413.

And the community loses out as well. The Big E isn’t just an annual event, it’s a century-old tradition that has become part of the fabric of this region.

Canceling the Big E was certainly the right move from a public-health perspective, and it makes sense on so many levels. But that doesn’t soften the blow for constituencies ranging from large corporations to homeowners near the fairgrounds who turn their driveways and lawns into parking lots.

The silence on Memorial Avenue this September will be deafening. And the blow to the region will be significant.

Coronavirus Special Coverage

Destination Unknown

John Doleva

John Doleva says the Basketball Hall of Fame still has a big, important year on tap, even if the schedule has shifted quite a bit.

As he talked with BusinessWest about his industry and his family’s hotel group, Kishore Parmar kept glancing back and forth between the lobby of the Hampton Inn in Hadley and the parking lot outside.

He did so with a look that blended something approaching disbelief — still, after roughly three months of the same view — with resignation.

“This lobby is essentially empty, and this is not how it is,” he explained. “If this were a normal day in June, you’d see families, you’d see business people in and out, there would be staff going up and down the hallways. We would be sold out for tonight, or very close to it.”

Instead, there would be maybe six or eight people staying in this 71-room hotel just off Route 9 that night. The lobby was empty. Just a few vehicles dotted the parking lot, all of which Parmar could identify as belonging to staff.

This view is a metaphor of sorts for what hotels have been experiencing since mid-March, something none of those in it have ever seen before. Business for the Pioneer Valley Hotel Group — which also includes a La Quinta by Wyndham in Springfield, Hampton Inn and Homewood Suites by Hilton in Hadley, Holiday Inn Express in Ludlow, and Hadley Farms Meeting House in Hadley — is off roughly 80% from what it was a year ago. And the numbers would be even worse if some first responders didn’t stay in these hotels in the early days of the pandemic.

Perhaps the most unsettling thing is that Parmar doesn’t know if, when, or for how long things will get appreciably better.

But while the view for all hoteliers in the region is similarly troubling, there are some signs of life in the broad tourism and hospitality sector. Indeed, many area restaurants are now open for outdoor seating, and a good number of them are creating intriguing spaces as they welcome back customers that have been relegated to takeout for more than three months.

Signs at the Hall of Fame

Signs at the Hall of Fame will use players’ wingspans to send a message about standing six feet apart — or, in Giannis Antetokounmpo’s case, more than seven feet.

Meanwhile, some tourist attractions are moving closer to opening their doors. The state’s casinos are eyeing a late June opening — although MGM Springfield has not committed to a specific date — while the Basketball Hall of Fame, which is in the final stages of a $23 million renovation project, is targeting July 1 as its reopening date.

President and CEO John Doleva isn’t sure what kind of turnout that opening will boast, although he told BusinessWest the Hall will be aggressive in marketing what was supposed to be a high point in a year of many high points.

“In January, I sat down with the senior staff and said, ‘first of all, this is going to be the greatest class ever — Kobe (Bryant), Tim Duncan, Kevin Garnett. That was before Kobe passed away, which was pretty unbelievable,” he recalled. “On top of that, we had a 100% new museum, top to bottom, that was going to open up on May 1” — not to mention a commemorative coin from the U.S. Mint, to be unveiled at the Final Four in early April.

The coin was eventually released, but the Final Four was cancelled, the 2020 induction was moved into 2021, and, who knows what the July 1 grand opening will bring? But Doleva is optimistic.

“The good news is, all these things are going to happen; it’s not like we lost them. They’re just not on the time frame we thought they would be,” he said. “But we do feel that people want to do stuff — but how will they decide?”

That equation has surely changed in the year of COVID-19.

“People always ask, ‘what am I going to see, what does it cost, how far away from my house is it, and what kind of experience is it?’” he noted. “But kind of rising to the top is, ‘what kind of procedures and protocols does an organization have in place to ensure my family’s health and safety?’

“Safety is paramount at any tourism destination at this point,” Doleva added. “You’ve got to communicate not the traditional marketing of ‘we’re fun and we’re affordable; your family’s going to have a great time and talk about it forever.’ It’s also, ‘you can come here and feel safe — and here’s everything that we’re doing.’”

And that presents an opportunity in a region rich in attractions that are often taken for granted by locals. There are indications that, due to real concerns about traveling in anything but a car, area destinations might get a boost from those looking to take a ‘staycation,’ rather than typical vacation, and that includes visiting sites where they feel safe.

“This lobby is essentially empty, and this is not how it is. If this were a normal day in June, you’d see families, you’d see business people in and out, there would be staff going up and down the hallways. We would be sold out for tonight, or very close to it.”

But a host of challenges remain for this sector, and questions remain about everything from how hotels will serve guests breakfast to whether there will be a Big E — which benefits a number of businesses in this sector — and what that fair might look like. But as tourism lurches back to something resembling life, there’s plenty of hope in the air, too.

Animal Attraction

It was opening day at the Zoo in Forest Park & Education Center in Springfield — a full nine weeks later than usual — but Sarah Tsitso liked what she saw.

“People are definitely responding,” said Tsitso, the zoo’s executive director, as guests took advantage of a new timed reservation system that, at least for now, lets only 10 people in every 10 minutes, to promote social distancing. “It’s great seeing families and children so happy being out seeing the animals, and the animals are happy to see their friends come back. We close the first week of November. That’s a long time to be closed to the public.”

The key word is ‘public.’

“The zoo is open 365 days a year for the animals. They live here, and they’re fed and get vet care whether it’s winter or summer. We rely on the visitor season to generate revenue for the months we’re closed.”

Those nine lost weeks cost the center some $200,000 in revenues, losing not just gate receipts but educational programs, a robust schedule of spring field trips, and three major events typically held annually between March and July.

“That’s a pretty huge loss,” she said. “We’re still not sure what’s happening with summer camps, which would start around June 25. We’re not sure what that’s going to look like.”

Whatever shape the summer takes, it will be better than the waiting game to reopen, during which the zoo managed to secure a Paycheck Protection Program loan to keep staff working and developed the protocols now in place, from a mask requirement and sanitizer stations to additional barrier fences and a one-way path around the grounds.

“It was certainly challenging, but manageable,” Tsitso said. “The biggest change was probably the timed ticketing system. But we were quickly able to identify a system that works for us and get it up and functioning. We were just waiting for the green light.”

The light turned decidedly red for Peter Pan Bus Lines back in March, CEO Peter Picknelly told BusinessWest.

“We ran for a few weeks once the pandemic hit, but within two and a half weeks, sales declined over 90%. So we shut down for about eight weeks,” he said. “Shutting down was one of the hardest things we have ever done.”

When the buses did start rolling again earlier this month, making limited runs to major destination cities, Picknelly was pleasantly surprised. “Activity has been pretty good,” he said after the first week, adding that the second week was looking even busier. “There’s a pent-up demand to get out of Dodge, and that’s what we help people do.”

One issue is that destination cities like Boston and New York are still reopening in their own way, and once the big cities fully open, he expects more of a rush. For now, the company is getting its “sea legs back,” he said, and making sure everyone on the bus feels safe.

Kishore Parmar

Kishore Parmar says the most unsettling thing about the pandemic, from the hotel industry’s perspective, is not knowing when business might get better.

To that end, Peter Pan has improved its contactless boarding procedures while introducing PermaSafe, a CDC-approved product that purifies passenger cabin air while making interior surfaces anti-microbial and self-sanitizing. The company also uses electrostatic handheld sprayers to sanitize and disinfect the buses every night. In addition, passengers are required to wear a face mask at all times, and employees have been issued personal protective equipment, including face masks and hand sanitizer.

“Here’s my theory — nobody wants to get sick; nobody wants to get someone else sick,” Picknelly said. “But nobody wants to be cooped up any longer, either. A lot of what we do is leisure travel, but people also have to travel for medical appointments, for school, for business. There’s not only a pent-up demand to get out of Dodge, there’s also a need.”

But, they also need to feel safe, he said. “As time goes on, people will be more and more comfortable getting out. I’m confident this is going to end way sooner than people think. And I think any smart business person knows, if you want customers to come in — and come back — you’ve got to make them feel safe and comfortable.”

At the hall of fame, protocols in place for the opening include regular disinfection of all frequently touched surfaces, complimentary stylus pens to use on interactive touchscreens, an electrostatic disinfectant air-mist system, and … well, the list is frankly too long to detail all of it here.

“We’ll have the clean team out in the museum unlike ever before,” Doleva said. “People will see it in action.”

And it’s important they see it, he added.

“People are clamoring to get out. They’re looking for the safe places that are paying attention — but I definitely think there is pent-up demand.”

Some will want to be among the early visitors, he added, while others will take a wait-and-see approach. “It will be a short summer, but we are going to showcase the museum. This is a grand-opening summer, and everyone has the opportunity to come here.”

Room for Improvement

Parmar told BusinessWest that, for his group’s hotels, and most all facilities not in the shadow of ski resorts, winter is a slow, difficult time.

And what he fears is that, unless some things change, 2020 might take on the look of a 12-month-long winter in terms of occupancy rates and overall vibrancy.

“We might go from winter … right into another winter,” he said, adding that July, at this moment, doesn’t look much better than June, and the rest of summer and fall amount to a giant question mark.

The company has essentially seen its busiest season wiped off the calendar, losing college commencements, visits to area colleges and universities, business meetings, weddings, bridal and baby showers, and much more.

This certainly isn’t what the company was expecting in 2020, a year that began with hopes and expansion plans. Indeed, this is the first full year for the Homewood Suites facility, opened just over a year ago and off to a solid start, and there were plans to create a new hotel on the site of the old Howard Johnson’s on the Mohawk Trail in Greenfield and completely renovate the Roadway Inn in Hadley, which is currently closed.

That’s were. “We had a plate full for this coming year, and we were very excited about it, but then we had it all taken away,” Parmar said, adding that those projects have been put on ice, and the company is essentially trying to make the most out of what will be a trying year.

The company applied for and received a PPP loan and used it to bring its employees back to work after many were furloughed earlier in the spring. The problem now is that the money is running out, and business certainly hasn’t come back — as evidenced by the parking lot and the front lobby. Parmar said there is little if any leisure business at this point, and also little if any business travel, as companies continue to rely on Zoom meetings.

“We’re bootstrapped right now — we’re counting every penny, we’re counting every dollar,” he said. “We’re doing our best to reduce every cost there is.”

While hotels might continue to struggle, however, many in the tourism sector feel they will see more ‘staycation’ action than usual — particularly if out-of-state travelers are put off by Massachusetts’ suggested (but not required) 14-day quarantine when entering.

“If someone from Enfield wants to come to the Hall of Fame, they’re not going to take a 15-day trip to see a one-day experience. So that’s got to be clarified,” Doleva said. “I do think it is an impediment to tourism. People see ‘suggested,’ they think ‘required.’ So we’re hoping for some clarification because it affects us, and it affects hotels, restaurants, and other attractions.

Doleva said he never foresaw what 2020 would bring when he began a two-year term as board chair for the Greater Springfield Convention and Visitors Bureau back in November. But he’s been impressed with the planning the GSCVB has done to hit the ground running once tourism ramps up again this summer.

“We have a very aggressive plan to advertise the region like never before, the attractions especially,” he told BusinessWest. “We’ve never brought people together the way we are now. That’s a blessing in disguise — this is bringing the different factions of the tourism business tighter than ever.”

As chair, he also hopes elected leaders develop a greater appreciation of the impact of the tourism and hospitality industry and the numbers of people it employs, as well as the taxes it generates — and make investments in supporting tourism statewide over the long term.

“I think, if we look for the silver lining, this has caused us all to step back and focus on how we’re all interdependent, and when one improves, we all improve,” he added. “We know we have something special out here. It’s a nice place to visit, we’ve got a lot of things to do, and the industry is very focused on safety. Now we need to move forward together.”

Joseph Bednar can be reached at [email protected]

Coronavirus Special Coverage

Breath of Fresh Air

Peter Picknelly, right, and Andy Yee

Peter Picknelly, right, and Andy Yee, two of the co-owners of the Student Prince, stand in a crowded Fort Street a few days after the restaurant reopened.

Lisa Pac has been brewing beer for almost two decades, eventually growing a home-brewing enterprise into Skyline Beer Co., a restaurant, craft beer and wine bar, bakery, and home-brewing supply store in Westfield.

In December, she and business partners Dana Bishop and Daniel Osella realized a dream of moving into a much larger space in the Whip City — a 4,500-square-foot restaurant, tasting room, and 10-barrel brewery on five scenic acres. Early receipts were very strong, and things were looking up.

And then March happened.

“At first, when COVID hit, we shut down for a couple days and had to reassess what we were going to do,” Pac recalled, adding that they told staffers to give them a chance to figure out a plan to stay operational and keep them working. “It was scary — we didn’t know what all this meant.”

But a plan did emerge. Pac and her team went to work simplifying and streamlining the menu before launching a robust takeout business, among other activities.

“It gave us a chance to re-evaluate a lot of things. We had such a strong start, but we got the rug pulled out from under us, so we were chasing our tails. But we were able to catch up with the day-to-day stuff, the construction stuff. It gave us the chance to breathe a little bit and finish up projects we were doing. We also came up with some top-notch beer recipes.”

Most important, while Skyline had to lay off about a third of its staff, a Paycheck Protection Program (PPP) loan allowed it to keep many employed, albeit with different responsibilities; servers shifted to production in the brewery, for example.

“The staff has been awesome, doing what they have to do to help us get here,” Pac said. “They were eager to work. Ever since getting the loan, we did it backwards — we have this staff that’s willing to do whatever we need, so what can we have them do?”

Eventually, Skyline was able to bring back about 90% of its staff; only three or four didn’t return, but the company has created new positions in the brewery, and actually has right around the employee count it had before the pandemic hit. And now that restaurants are allowed to serve patrons outdoors, 14 tables dot an outdoor area, while a major construction project on the back patio awaits Wetlands Commission approval to move forward. “We’ve got some big plans for back there,” Pac said.

Skyline Beer Co

Skyline Beer Co. partners Dana Bishop, Lisa Pac, and Daniel Osella.

Munich Haus in Chicopee has been planning for the reopening as well. Back in March, owner Patrick Gottschlicht recalled, “we shut down completely given all the unknowns surrounding everything. Then we decided to reopen for curbside service, to take the first step in the direction of getting reopened — and our to-go business was more than it has been in the past. A lot of regular customers who hadn’t been able to dine in for a while were excited to get curbside.”

After weeks of takeout only — helped by a PPP loan that got some employees back on the payroll — the German restaurant recently opened its large, outdoor Biergarten, as well as its smaller front deck, and packed them in — well, maybe ‘packed’ isn’t the right word, considering some tables were removed to maintain safe distancing, but the place was booked solid its first week.

“With the big biergarten and the deck, we took advantage of the nice weather. And I think people, with all the restrictions lately, are excited to get back out and get some semblance of normalcy. People are eager to get back out into the world.”

“We were excited to reopen, after being shut down for a while there,” Gottschlicht told BusinessWest. “With the big Biergarten and the deck, we took advantage of the nice weather. And I think people, with all the restrictions lately, are excited to get back out and get some semblance of normalcy. People are eager to get back out into the world.”

Raring to Go

‘Eager’ is also a word that applies to Peter Picknelly when BusinessWest caught up with him two days before the Student Prince & the Fort were set to reopen, with Fort Street in downtown Springfield closed to traffic to accommodate tents, lighting, live music, and anything else that might transform an outdoor dining experience into something a bit more.

“I’m really charged up about what’s happening on Fort Street,” said Picknelly, one one of the establishment’s owners. “We’ve got our menu, all the Fort specialties, and we’ll have entertainment Thursday through Sunday night. It’ll be a downtown festival — we’ve got lights, flags, beer wagons … it’s going to be really cool. It’ll be like a German carnival out there, a mini-Octoberfest between now and Labor Day.”

But one that, at least at first, requires a shift in diner — and server — behavior. The restaurateurs we spoke with talked about table spacing (at least six feet), 90-minute limits on seatings, regular sanitizing practices, and making sure patrons wear a mask, except when sitting down at the table.

“We’ve got the tables about eight feet apart, and people have to wear masks once they leave their table,” Pac said, adding that the team is sanitizing every pen that comes back in, while wearing gloves to boot. In short, she’s balancing guests’ enthusiasm to be dining out with their safety.

“People are champing at the bit right now. That’s why it’s important to make sure we’re safe,” she added. “People do get caught up in the moment — they want to take their masks off and talk to people at another table. I’m a social person; I want to talk to everyone, so I’m trying to keep myself away from the front. It’s a natural thing — we want to talk and hang out. But we’ll constantly remind people about the masks.”

Gottschlicht’s team has been equally diligent. “We’ve already got outdoor seating, which is a big challenge for some restaurants that don’t already have it,” he said. “We went over all the government and DPH restrictions for reopening and implemented all those, and now we’re starting to work on the indoor phase — finding out what restaurants will look like and developing a plan for that.”

At press time, state guidance on indoor dining was still forthcoming, but restaurants are doing their best to plan based on what they’re hearing and common-sense predictions.

The front deck at Munich Haus

The front deck at Munich Haus, as well as the large patio known as the Biergarten, opened recently to very solid business.

“Until the guidance is released, we’re trying to put together a game plan for that, so we’re somewhat ahead of it,” Gottschlicht added.

Picknelly expects indoor seating to begin very soon, perhaps at 25% capacity, though he hopes for 50%. “Until then, the outdoor scene is going to be great.”

He’s just as excited to reopen the White Hut as well, the venerable West Springfield landmark that has begun its second life as a food truck before opening the doors to a renovated indoor space on July 4. And he knows others are pumped, too, to have a variety of dining choices, both casual and takeout, suddenly spring back to life.

“I love my wife’s cooking, but I want to get back out to restaurants,” he said. “There’s a whole other feel to it. It’s entertaining, it’s fun — let someone else serve and do the dishes.”

Next Course

To be sure, restaurants are still dealing with significant challenges, from carving out alfresco seating where none exists to limiting the number of people they can serve to the question of meetings and banquets. Gottschlicht said some event bookings for later this year at Munich Haus have been canceled, while others are waiting to see what restrictions might emerge — for instance, whether they’ll be faced with 50% occupancy or be able to pack the house.

We’re hoping to get some guidance on what we can and can’t do,” he told BusinessWest. “Some want to reschedule, others are taking a wait-and-see approach.”

At the very least, though, dishes are pouring out of the kitchen to guests who are happy just to be getting out of the house.

“It’s a great feeling to get the place back open, and get the staff back to work, too. We’re going on our 16th year, so we’ve put a lot of blood and sweat into Munich Haus and plan to be around a lot longer. I was born in Germany — we’re proud of what we do, of being an authentic German restaurant. It’s definitely a good feeling being back open.”

Pac is feeling good too — partly because business is back up to maybe 90% of its former pace, considering the outdoor dining, continued takeout service, and the brewery.

“I would never wish it on anybody,” she said of the almost three-month economic shutdown, “but I can’t complain because it helped us dial in and gave us a minute to get on the same page with everything. It’s been a wild ride.”

Joseph Bednar can be reached at [email protected]

Coronavirus

The Grass Is Greener

By Mark Morris

Brian Campedelli

Brian Campedelli says the pandemic has definitely contributed to a spike in landscaping business.

On his daily commute from Wilbraham to East Longmeadow, Dave Graziano has never seen lawns as green as they are this year — even with the recent lack of rain. And as project manager for the landscape division of Graziano Gardens, he knows a thing or two about green lawns.

“More than ever, people are working on their homes and their yards,” Graziano said. “Because they’ve been stuck at home for the last few months, they’re way ahead in their yardwork projects.”

BusinessWest spoke with several area landscape contractors who say their residential business is booming this year. With people spending so much time at home, yard projects — both large and small — that were delayed in the past are now getting done.

“There’s definitely a correlation between COVID-19 and a spike in our business,” said Brian Campedelli, president of Pioneer Landscaping. “People are stuck at home and want to enhance their lifestyle, so they are improving their yards.”

For some homeowners, the scale of yard projects has gone far beyond replacing some shrubs or reseeding a lawn. Contractors are finding most of their business has shifted to hardscape projects, such as stone patios, stairways, and outdoor kitchens. Projects like these can cost around $20,000, with larger and more elaborate designs exceeding $100,000. For one project, Campedelli and his crew are working on a “massive patio” with an overhang attached to the house to shelter a bar underneath.

“We’re installing a TV with surround-sound speakers, as well as a firepit so they can chill out next to their pool.”

Where patios already exist, Campedelli said some homeowners want to rip out the existing structures and start fresh with new construction, while others enhance what they have by adding a firepit or accent lighting.

According to Gary Courchesne, president of G & H Landscaping, accent lighting has been in high demand in recent years. Also known as low-voltage accent lighting, it’s the subtle lighting that can enhance a home’s aesthetics, safety. and security.

“Because they’ve been stuck at home for the last few months, they’re way ahead in their yardwork projects.”

“As important as the safety and security features are, about 90% of the time, people choose accent lighting for aesthetic reasons,” Courchesne explained.

Improvements like lighting help owners to better enjoy their property now, while boosting curb appeal if they ever want to sell. Real-estate website Homes.com estimates that, when homeowners install accent lighting, they can recoup about 50% of their investment to the eventual resale value of the home. The return on investment for patios and decks can range from 30% to 73%.

No matter what project homeowners choose, they all have the same objective: low maintenance. Courchesne said some of his customers have asked for “no-maintenance” shrubs. While those don’t exist, he and his crew design layouts with reduced maintenance in mind.

“For example, instead of filling around the shrubs with mulch, which needs replacing every year, we’ll use stones,” he said. “People are definitely leaning toward designs that look nice and are easy to maintain.” 

Graziano echoed that point, noting that, when he replaces old shrubs with new ones, his customers want landscapes that are easy to care for and do not require lots of maintenance. “Everyone has busy lives, and they don’t want to be burdened with spending too much time on yard care,” he said.

For many years, sprinkler systems have been an effective way to maintain lawns with minimal effort and continue to be popular this year, especially newer, more efficient models.

“People who did not have sprinkler systems are getting them installed,” Courchesne said, “and those who own systems but haven’t run them much are using them more this year.”

Growing Revenues

While landscape companies are busy with plenty of projects, it’s not exactly business as usual.

Each day starts with making sure workers have the proper face masks and other personal protective equipment they’ll need for that day. In the past, a crew might ride together to a job, but state guidelines now mandate one person per vehicle, and shared equipment must be disinfected in between users. Contractors have adjusted to all these extra steps because they are grateful to be considered an essential business.

That essential status wasn’t a given at first, though. Back in March, when Gov. Charlie Baker released the first round of essential industries that could remain open during the COVID-19 pandemic, the landscape industry was not explicitly listed. The guidelines allowed for some interpretation that would include them, such as support of essential construction projects.

Gary Courchesne says accent lighting is becoming more popular

Gary Courchesne says accent lighting is becoming more popular

So a coalition of landscapers, golf-course superintendents, and related professionals formed the Green Industry Alliance of Massachusetts (GIA) and appealed to the governor to specifically identify landscaping as an essential industry. The group’s argument centered around the short time window that spring presents for fertilizing, as well as controlling mosquitos, ticks, and other invasive species. The GIA also noted that many homeowners who are physically unable to take on lawn care depend on outside companies to maintain their property.

Shortly after the appeal, the governor declared landscapers essential providing they follow CDC guidelines.

Courchesne said the initial confusion of whether or not they could start their season resulted in some starts and stops in the beginning, but his company is now up to full speed and adjusting to the new protocols.

“Normally, we start the day with our full staff gathered around a conference table,” he said. “Now, we’re meeting in smaller groups out in our yard, so even if there was an infection, it’s not spreading to everyone.” 

In early March, before the governor had ruled on landscapers’ status, Greg Omasta, president of Omasta Landscaping, temporarily closed his business over concerns about the spread of coronavirus.

“We closed for three weeks to make sure all our people were healthy,” he said, noting that this decision put his business behind in some of its early spring projects. “We’re scrambling now to get bark mulching done and plant seasonal flowers and such.”

Campedelli said his company also lost some work early in the spring due to delays caused by COVID-19, but he understands the changing nature of the virus and the guidelines. “We stay current on the latest requirements regarding COVID-19, and we make sure to share those with our workers as they happen.”

A few landscapers say hardscape projects are surging.

A few landscapers say hardscape projects are surging.

Since the go-ahead in March, Campedelli said his company is so busy, he would hire 10 more people if he could. Having enough workers is also a constant challenge for Omasta, who has 30 workers on staff but would like to add six or eight more.

Several contractors said one particular challenge in finding workers this year involves the Pandemic Unemployment Assistance program, which allows unemployed workers to collect an additional $600 per week through late July. While they all agree the program has merits and is important to help those who are struggling, they also point out that the additional $600 a week keeps some people on the sidelines who would otherwise be working.

Sometimes, filling open jobs is difficult because of the nature of the work. Graziano said the industry has been the same for more than 50 years, and it’s not for everyone. “Either you like to put a shovel in the ground, move mulch around and install pavers, or you don’t,” he told BusinessWest.

A typical landscaping season can run nine months, with three winter months dedicated to snow plowing. As Omasta pointed out, the length of the season is always tied to weather, which determines how early they start in the spring and how late they can work in the fall.

Even when the season is in full swing, rain is a constant variable to consider, Courchesne added. “There was one week in May when, out of six work days, it rained four of them.”

Home Games

When the rain clears, people are looking to get outside, but they’re not ready to stray too far. Until there is more certainty about the coronavirus, many are choosing not to go away on vacation.

Because of this uncertainty, Omasta said, his customers have made the decision to stay put rather than spending a week at the Cape.

“They’re telling me they want to stay home and work on some improvement projects so they can enjoy their backyard this summer,” he noted.

It’s not unusual for homeowners to want a big improvement project and then procrastinate on making the final decision. Courchesne said this year seems different.

“I’m seeing people with less hesitation than normal in their purchasing attitude,” he noted. “They’re saying, ‘we’re home, so let’s do this.’”

Because more people are home, even working from there, he added, they are realizing their home is not such a bad place — and they want to make it even better.

And that has made this a different kind of year for this industry.

Coronavirus

Supply Chain of Events

Supply chain.

That’s a two-word phrase that had rarely made its way into the lexicon of most area residents before the COVID-19 pandemic; it was generally assumed that the shelves in the stores would be crammed with product — because they always had been.

But in a year when there have been shortages of cleaning supplies, surgical masks, beef, fish, hair coloring, paper towels, ice cream, rice, frozen pizza, and, yes, toilet paper — a product that has become a metaphor for a crisis — people can no longer take supply chain, and full shelves, for granted.

This has been a learning experience — on a number of levels.

So too for those who work to keep the shelves stocked. For them, it’s a time of relationship building, finding new ways of doing things, and providing ongoing proof that, while the supply chain has been bent — severely and repeatedly — it hasn’t, in their minds, been broken.

“The supply chain has definitely been tested through all this, and there have been shortages of some things, as everyone knows,” said Michael D’Amour, chief operating officer at Springfield-based Big-Y, the fourth-generation, family-owned grocery chain. “But, overall, I think this crisis has shown just how resilient the supply chain is.”

 

Michael D’Amour

Michael D’Amour

“The supply chain has definitely been tested through all this, and there have been shortages of some things, as everyone knows. But, overall, I think this crisis has shown just how resilient the supply chain is.”

 

Doug Baker, vice president of Industry Relations for the Food Marketing Institute, (FMI) agreed.

“Almost weekly we’re getting back numbers, and we’re still seeing double-digit growth across many categories — and you can’t have double-digit growth if inventory is not available,” he said, referring to specific product lines ranging from cleaning supplies to frozen foods. “It’s just a matter of matching inventory with consumer demand, and that’s been the challenge.

“And that’s why we’ve seen shortages — because that inventory output hasn’t been able to rise to the level of consumer demand,” he went on, adding that recent numbers show a slowing of demand that is giving many producers at least a chance to catch up.

In March, on average, the industry was seeing 35% to 40% increases in overall sales volume, Baker said, while in late May, the number was closer to 20% to 25%.

“We’re seeing sales slow, which is helpful because it allows the supply chain to catch up to an extent,” he explained. “But we also have to understand that those are still pretty significant increases, and we’re not going to go back to pre-COVID days, because the public still has yet to engage in a livelihood that they engaged in before the pandemic, and that’s based on where you see them spending their food dollar.”

D’Amour agreed, noting that, as May turned to June, a good number of people were still in something approaching lockdown mode. They were eating most meals at home because restaurants were only open for takeout. They were also still working at home and, therefore, eating lunch at home. Meanwhile, children are home from school, and college students are home as well. This all adds up to people buying more at the supermarket.

As phase 2 of Gov. Charlie Baker’s reopening plan takes effect on June 8, restaurants will be opening for curbside dining, and preschools and day camps will be reopening. And as more and more people go back to their offices — the ones they left in March for space on their dining room table — the ratio of food dollars spent out of the home will start to rise higher.

How long it will take to reach pre-COVID levels — when 54 cents of each dollar was spent outside the home — remains to be seen, said Baker. However, what is certain is that the situation is fluid at best and it could change in a hurry if cases start to surge, a second wave arrives, and people start spending more time working — and eating — at home.

Doug Baker

Doug Baker

“We’re seeing sales slow, which is helpful because it allows the supply chain to catch up to an extent. But we also have to understand that those are still pretty significant increases, and we’re not going to go back to pre-COVID days, because the public still has yet to engage in a livelihood that they engaged in before the pandemic, and that’s based on where you see them spending their food dollar.”

Meanwhile, this new normal has essentially forced chains like Big Y to forge new alliances with suppliers, said D’Amour, noting that as restaurants, colleges, and schools of all kinds closed earlier this year, this created an enormous surplus of inventory, but put the demand on grocery stores, while also creating an opportunity to redeploy goods and resources to grocery retail to meet demand and reduce waste.

One such alliance, one that typifies how suppliers and grocers are working together to forge solutions, involves Little Leaf Farms in Shirley, a local partner and grower of lettuce that saw demand decline dramatically as schools and restaurants closed a few months back and was looking for new opportunities to sell product and reduce the kind of waste that was seen almost nightly on major news broadcasts.

“They’re one example of so many local partners who have sat down with us and worked to figure out how to maximize business between us and keep their stuff growing and moving through the pipeline when the restaurants were shut down,” D’Amour explained. “We worked with them on supply and hotter deals and pricing to keep it moving through the grocery channels.”

For this issue, BusinessWest talked with several players involved with supply chain about the lessons learned to date and how they will help the broad food industry through the uncertain months to come.

Food for Thought

As noted earlier, the laws of supply and demand generally take care of shortages on store shelves — in normal times.

But these are not normal times, said those we spoke with. Still, those laws have applied to items like surgical masks. Hard to find only six weeks ago, they are now seemingly everywhere, and in large quantities, as a number of companies started making them — and more of them.

“Everyone’s getting into the mask business now,” Baker explained, adding quickly that it’s much easier to convert machines to make those products than it is to supply more canisters of Lysol or make more rolls of toilet paper, as simple as that might sound.

“Paper manufacturers have been putting in additional lines,” he said. “But the challenge the industry is facing now is that there two types of fiber used to make toilet paper — there’s recycled fiber and there’s virgin fiber, and with recycled fiber, the supply is low, and not every machine can be converted to use virgin fiber, so you’re going to have less output if you can’t convert.”

And sometimes, because of the pandemic, producers simply cannot meet demand.

That was the case for several weeks — although matters have improved — when it came to supplies of meat and chicken, said Baker, noting that, early on, plants were shut down temporarily. And when they reopened, to keep workers safe, production lines were altered in ways that actually slowed production.

Such specific cases help explain shortages of particular items, said those we spoke with, adding that, overall, many of the empty shelves result from unprecedented demand and panic buying that is starting to wane in many instances. But as the year continues, more lessons will certainly be learned, said D’Amour, adding that there have been plenty of learning experiences already.

Elaborating, he said that, from the beginning, those at Big Y have been watching what’s happening globally, anticipating, and “trying to get on top of things” — a phrase he would use many times — when it comes to everything from employee and customer safety to creating efficient traffic flow in the stores, to keeping items on the shelves.

This has obviously led to new policies and procedures — from the directional arrows on the floors to special hours created for seniors to the plexiglass screens at the check-out counters.

“For us, the biggest component is the people part, and that continues to be stressed by our suppliers, wholesalers, and others,” he said, adding that, while much of that panic buying and hoarding is being talked about in the past tense, the need for diligence remains, and chains like Big Y can’t let their guards down.

Getting back to the supply chain, D’Amour said it has been a struggle in some well-documented areas, but suppliers are responding by trying to increase supply and also reduce the number of overall SKUs to help put some product on the shelves.

“Where people are used to walking down the paper aisle and seeing 150 different choices of bath tissue and paper towels, now they’re seeing far fewer,” he said. “But products are coming back; we’re working with all our partners to get them back in.”

Perhaps the biggest key to providing quality service to customers during the crisis has been efforts to forge new partnerships and stronger relationships with those within the food-service industry, said D’Amour. He mentioned ongoing work with Springfield-based Performance Food Group as one example.

“They’ve done a phenomenal job working with us, working together, to figure out what food they have stuck in the pipeline that we can use,” he explained, adding that, over the past several months, PFG, as it’s called, has even helped with trucking and labor for either Big Y’s warehouse or at wholesale partners. “Most of these partnerships we’ve had have been mutually beneficial, but there are strategies and tactics that we’ve never done before; everyone’s been very open and ready to fight the battle, work together, and think of new ways to partner for the benefit of the consumers.”

Which brings him to Little Leaf Farms. Paul Sellew, owner and founder of that facility, which began operations just four years ago, said it is now part of a larger local-food movement that not only puts fresher produce on the shelves, but in many ways helps ease flow of product through the supply chain.

“People don’t realize that 95% of the leafy greens that you see in the grocery store are grown in California and Arizona,” he explained. “And when you have this global pandemic, an unprecedented situation, that puts stress on the supply chain, so imagine managing a supply chain from Selinas, California to Springfield, as opposed to my supply chain, from Devens, Mass. to Springfield.”

Little Leaf has historically seen much of its business fall into the broad category of food service — restaurants, schools, and other institutions. But with the pandemic and the sharp decline of demand on that side, the company, like many other suppliers, has shifted into retail grocery, which has been a win/win/win, for those growers, the grocers, and, ultimately, consumers.

“When you get these unprecedented events, you really want to make this region stronger and more resilient, and food is such a strong, fundamental component of that,” he went on. “And that’s why we’re so grateful for partnerships like the one we have with Big Y, which has supported us from day one.”

Overall, there is a ‘new normal’ within the grocery/food-service industry, a phrase now being heard in virtually every sector of the economy. It involves a landscape that could change quickly and profoundly depending on the pandemic and its impact.

No one really knows when there will be real light at the end of the tunnel, said D’Amour, adding that Big Y, like all those it is partnering and working with, needs to remain nimble and flexible, and continue to work in partnership with others to not only keep the shelves stocked, but also keep people safe.

Bottom Line

Summing up the past several months, those we spoke with said it’s been a challenging and in many ways difficult time, where, again, many important lessons have been learned that will serve consumers, suppliers, and retailers well in the uncertain months still to come.

“The United States is a country of abundance, and the supply chain is a beneficiary of this abundance,” Baker said. “Yes, the supply chain is strained, and some shortages will be experienced, but it’s not broken — there are not critical disruptions in the supply chain.”

The hope, and the expectation, said D’Amour, is that things will stay that way.

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

Coronavirus Cover Story

Shell-shocked Businesses Respond with Grit, Determination

The COVID-19 pandemic has rocked businesses large and small in virtually every sector of the economy. The individual stories vary somewhat, but there are several common themes — lost revenue streams, struggles to make payroll and pay the bills, and large amounts of uncertainty about what the future holds. But there are other commonalities as well, including a willingness, born of necessity, to respond to this crisis — the worst situation any of these business owners have faced — with determination, imagination, and the will to find a way to get to the ‘other side.’ For this issue, BusinessWest talked with 10 business owners about what has happened since the pandemic arrived with brutal force three incredibly long months ago, and how they’re battling back. These are their COVID stories.

Zasko Productions

Event company works to pivot, position itself for the long term

Jim White says business at Go Graphix is down considerably

Go Graphix

In a sign of the times, this company has pivoted into new products

Dr. Yolanda Lenzy

Lenzy Dermatology

Practice owner says many patients still wary of returning to her office

Liz Rosenberg

TheToy Box

Shop owner finds ways to share joy at a time when it’s badly needed

Teddy Bear Pools

During peak season, this area fixture is making up for lost weeks

Sarah Eustis

Main Street Hospitality

Hotel group continues to grow through an uncertain time

Lenny Underwood

Lenny Underwood

For this photographer and sock maker, the pandemic is a developing story

Doug Mercier, right, with brother and partner Chuck

Mercier Carpet

Pandemic poses challenges, opportunities for flooring company

Bernie Gelinas said his appointment book has been full

Cuts Plus

Salon owner says he missed the relationships the most

Eastside Grill’s new outdoor seating area

Eastside Grill

Restaurant owner says reopening will be exciting, but scary, too

Coronavirus

Event Company Works to Pivot, Position Itself for the Long Term

Mike Zaskey says his ‘spreadsheet of doom’ includes more than $1.2 million in lost events for this year, but he’s pivoting with virtual events and other initiatives.

Mike Zaskey calls it his “spreadsheet of doom.”

And for good reason.

It chronicles what he estimates to be $1.2 million in lost business since early March, when the phone started ringing … and kept on ringing. On the other end were representatives of corporations, colleges and universities, and nonprofits calling Zaskey to let him know they were canceling or postponing — in most all cases, the former — the large events his company, Chicopee-based Zasco Productions, has come to specialize in.

“After a while, I was afraid to answer the phone, because every time I did there was a cancellation,” said Zaskey, noting that more than 40 major events, including 20 college commencements, have been erased from the calendar. In fact, when he talked with BusinessWest just after the Memorial Day weekend, he was lamenting how what was normally a very busy week for him — clients Holyoke Community College, Springfield Technical Community College, and the Rhode Island School of Design traditionally schedule their commencements for the final days in May — was now anything but.

Indeed, a business leader who rarely has time on his hands, especially at this time of year, now has way too much of that commodity. And he’s devoting it to everything from finding ways to somehow pivot — some more successful than others, as we’ll see in a minute — to advocating for an industry that is large and impactful, but often flies under the radar.

“The Live Events Coalition has put together some interesting statistics, and by their estimates, the live-events industry employs 12 million people and contributes more than $1 trillion into the U.S. economy,” he said, adding that few understand the size or importance of a sector that includes everything from venues to caterers to companies like Zasco. “If live events were a state, we’d rank seventh in population.”

Turning the clock back to early March, Zaskey said that’s when he first started getting calls from “six-figure clients,” as he called them, inquiring about cancellation terms in their contracts.

“It was around Friday the 6th,” he recalled, noting that some dates stick in his mind, for obvious reasons. “I got a few e-mails before that, but things really started to get scary on March 6. We had a team meeting at the end of that day, and I said, ‘something’s going on here, and we all need to be aware of this.’ And it just ballooned from there.”

The calls kept on coming, he went on, adding that the events, as noted earlier, have been canceled, not postponed.

“Most of these events are not being postponed — it’s revenue lost; it’s not coming back,” he told BusinessWest. “If there’s an annual event, a 2020 gala or conference, the 2020 event is not taking place, and they are going to have one in 2021. But the event in 2021 is the 2021 event.”

Despite these losses, one of the first decisions Zaskey made was to work with clients when it came to deposits and existing balances.

“A number of clients have multi-year contracts with us, so their deposits were paid two or three years ago, depending on the terms of the deal,” he explained. “Technically speaking, our contract says that, when an event is canceled, the deposits are non-refundable, and, in some cases, the client would still be liable for the cost of the event. But, in looking at the situation going on in the world, we decided that the right thing to do would be to apply those deposits to future events for clients, and that’s exactly what we did across the board.

“Most of these events are not being postponed — it’s revenue lost; it’s not coming back. If there’s an annual event, a 2020 gala or conference, the 2020 event is not taking place, and they are going to have one in 2021. But the event in 2021 is the 2021 event.”

“While it’s not the greatest for our financial position,” he went on, “it’s the best for our customers, and we’re looking to build long-term relationships with those customers and keep those customers.”

And a few customers have returned the favor by essentially paying balances due for next year’s event now, to help the company with cash flow.

Faced with its spreadsheet of doom, Zaskey said his company, which eventually had to lay off most of its 12 employees, looked to pivot in an effort to create some revenue streams. And upon taking a hard look around, he said one early option that presented itself was to put Zasco’s large fleet of trucks to work as couriers.

“But it doesn’t generate as much revenue, and we would probably actually lose money if we tried to turn into a delivery company — we’re not set for that,” he told BusinessWest. “We did actually try it — a friend of my owns a courier service, so we did a day of deliveries. But the revenue we generated versus the hassle of trying to pivot into an industry we weren’t suited for just didn’t work out.”

The company has had more success pivoting toward the staging of virtual events.

“A virtual event is more than just a video webstream or livestream,” he explained, adding that he’s now working with several clients on such initiatives. “We’re trying to capture the elements of a live event that can be held across multiple sites and make them feel like they’re at the actual event.”

Summing up what’s happened and what might happen moving forward, Zaskey summoned a phrase put to use by just about every business owner in Western Mass.: “we’ve never experienced anything like this before.”

Indeed, and while the short term (and that spreadsheet) looms ominously, this company, which put itself on the map by pulling off big events, continues to position itself for the long term — and, more specifically, a time when Zaskey won’t be afraid to pick up the phone.

—George O’Brien

Coronavirus

In a Sign of the Times, This Company Has Pivoted into New Products

Jim White says business at Go Graphix is down considerably

Jim White says business at Go Graphix is down considerably because major clients like MGM Springfield have shut down, but he’s managed to pivot and get work like these social-distancing signs.

Jim White says it took him 15 years to go from zero to 60 with his business. And 15 days to go from 60 to zero.

That’s how the co-founder of East Longmeadow-based Go Graphix, a maker of signs, vehicle wraps, and a host of other marketing products, described that two-week period back in March when business came to a near standstill.

That’s because most all of the company’s major clients — MGM Springfield, the MassMutual Center, sports teams like the Thunderbirds — came to a complete halt.

It seems like years ago now,” White said of those days in March. “It was tough — probably the toughest times I’ve experienced in business.”

With many of those businesses still shut down, Go Graphix has pivoted into other niche products that could be described as ‘COVID-related,’ said White, adding that it now has what could be called a line of ‘back-to-work’ products, including social-distancing graphics — those ‘Please Stay 6 Feet Apart’ signs now appearing across the region — as well as the protective barriers that are also appearing almost everywhere.

Still, revenues for April and May of this year are down roughly 80% from their levels of a year ago. The company, which had to lay off a few workers and cut most employees back to four days a week, has been helped by federal assistance, specifically the Paycheck Protection Program (PPP) — and White’s ‘save for a rainy day’ philosophy, passed down by his parents.

“That’s what you get with the son of a commission-only heavy-equipment sales rep,” he said. “We knew every recession, because it was a depression. And my parents saved, and I learned from them.”

Flashing back to early March, White said that’s when a number of major clients had to shut down operations, which brought operations at the Benton Road facility to something approaching a standstill.

Those clients include MGM Springfield, for which the company makes a wide variety of promotional items, from signage for upcoming events to the dasher-board advertisements for the skating rink.

“That’s what you get with the son of a commission-only heavy-equipment sales rep. We knew every recession, because it was a depression. And my parents saved, and I learned from them.”

“They’ve been one of our best customers,” said White, noting that his company was one of many fortunate local businesses to become vendors for the casino operator. “Throughout the casino, you see a lot of promotional graphics, and we were doing things on a weekly basis — work that came to screeching halt.”

But even clients that weren’t shut down and were actually doing well had put work given to Go Graphics on hold, said White, citing the example of beer distributors, for which the company provides vehicle wraps.

“They were so busy, they couldn’t leave the trucks with us for a day to be wrapped — they needed them on the road,” he explained. “They were hitting all the package stores, which were doing really well during all this. That was tough one for us; we’re thinking, ‘even the guys who are doing great can’t do any business with us.’”

Beyond the PPP loan, what has helped the company through the crisis has been its ability to adapt and create new product lines. White calls this the “great pivot.”

It involves making plexiglass shields for a number of clients, including Baystate Health, Monson Savings, J. Polep, Hartford Hospital, and others, as well as social-distancing signage now seen in virtually every sector of the economy.

As he talked with BusinessWest at the plant, he stopped to display the round ‘Please Stay 6 Feet Apart’ signs bound for Staples’ corporate headquarters, a contract that has provided a good amount of work for the company.

As for the plexiglass partitions, most of them are custom orders, and the work is intricate, which is why a number of businesses across several sectors have decided on Go Graphix for the work.

“We’re not just providing an off-the-shelf solution,” he said, while pointing to some models bound for Baystate Health. “And the orders keep coming in — we’ve pivoted, and we’re going for it.”

And White has to hope that the orders keep coming in, because plexiglass is now a commodity; amid fears that short supplies would become even shorter, he ordered a lot of it.

“It’s kind of toilet paper in the early days of this pandemic,” he said with a laugh. “Everyone’s looking to get it, and it’s becoming harder to find. But we have some good suppliers, and I’ve made the investment in a good amount, even though it scares me to the core. I figured, ‘I’d better be the guy who has it on hand,’ and just pray that we sell it.”

All indications are that he probably will as companies scramble to take the necessary steps to reopen, a process likely to play itself out over the next several months.

As White said repeatedly, this isn’t work he could have imagined doing just four months ago, but he’s very grateful to have it — an attitude that’s understandable after watching a company go from zero to 60 to 15 years, and 60 to zero in just a few painful weeks.

—George O’Brien

Coronavirus

Practice Owner Says Many Patients Still Wary of Returning to Her Office

Dr. Yolanda Lenzy

Dr. Yolanda Lenzy, like many healthcare practitioners, says many of her patients are reluctant to come to the office out of fear of contracting COVID-19, leaving overall volume down considerably.

Dr. Yolanda Lenzy admits to not knowing exactly what would happen when she officially reopened the doors to her Chicopee-based dermatology practice on May 18.

She knew what she was hoping to see — that patients who had put off coming to see her for more than two months out of fear of the virus would start scheduling appointments and getting their concerns and even routine checkups addressed.

And while that’s happening to some degree, the numbers are not what she hoped, although Lenzy would be the first to say that two weeks’ worth of data is probably not enough to make a definitive statement on what it all means.

“Last week was better than this week,” she said toward the tail end of May, adding quickly that she wasn’t sure just how this was attributable to the Memorial Day holiday or other factors. “We’re still not reaching the numbers we set as a goal — even the reduced numbers we established by limiting the number of office visits to half what they would be normally to allow social distancing.”

Lenzy, who opened her practice in 2014 and quickly built up a clientele of some 30,000 patients, believes her venture is typical of most others in the broad healthcare realm when it comes to the impact of the pandemic and the ways in which it has changed business — in some cases for the long term.

This is true of everything from the emergence of telehealth as a way to evaluate patients remotely (more on this later) to the manner in which the crisis brought the practice to a precarious place, where Lenzy, who has a staff of nine, wasn’t sure if she was going to able to make payroll.

With some relief from the CARES Act, specifically in the form of a Paycheck Protection Program (PPP) loan, Lenzy has been able to pay people and keep all her staffers employed — although that money can only be used for another few weeks.

She — like just about every small-business owner who has received such a loan — is already starting to think about what happens when that money runs out. That’s because normal, as in life in mid-February before the pandemic reached Western Mass., still seems a long way off.

Flashing back to the pre-pandemic days — that’s a phrase all business owners and managers have added to their lexicon — Lenzy said hers was a very busy practice. And while deemed essential because of the services it provides, the office closed on March 18 — again, like most all healthcare practices in the region — and shifted to seeing patients virtually.

And, for the most part, this move to telehealth went smoothly.

“It was definitely a generational piece,” she explained. “Some of our older patients had some difficulties, but they were able to get people to help them; some people don’t have smartphones or don’t have computers with cameras, so we did so some phone visits. But some people preferred to wait until we were back in the office.”

As for the business, while Lenzy she kept all her employees on, she cut back hours from 40 to 30 a week. “That was still a stretch,” she said. “But I wanted to keep everything going.”

“Even with seeing people virtually, we were barely able to meet payroll, let alone all our other expenses. That program did exactly what it was designed to do.”

The PPP money arrived her account in the beginning of May, and it provided some desperately needed breathing room.

“Even with seeing people virtually, we were barely able to meet payroll, let alone all our other expenses,” she said, adding that there are many of those, including rent and supplies. “That program did exactly what it was designed to do.”

The practice reopened exactly two months after it closed, but this was and is a phased reopening, she explained, noting that, to maintain social distancing, roughly half the staff works at home a few days each week and continues to see patients virtually.

“There’s always one provider in the offices at a time to see patients,” she said. “And we’re limiting the number of patients per hour that are in the office; with our specialty, we do a lot of procedures, like biopsies and freezing, so a lot of the patients that we’ve seen virtually needed to come into the office and have something done.”

They’re coming in, but, as noted earlier, not in the numbers this practice needs to get back on secure financial footing.

“We cut our volume in half, but we haven’t been able to even do that,” she said, adding, again, that she’s working with a small sample of data. “In talking to our front desk, we have some people who still don’t want to come out, so we’re trying to convert those people to virtual care.”

As for when things will get better and those numbers will improve, Lenzy said that will happen when and if more people feel comfortable enough to go back to the office.

“Our success and how we fare depends on peoples’ comfort levels,” she told BusinessWest. “And right now, it’s too early to say when people will reach this comfort level. My front desk is telling me that now, many people are saying, ‘I just want to wait.’”

—George O’Brien

Coronavirus

Shop Owner Finds Ways to Share Joy at a Time When It’s Badly Needed

Liz Rosenberg

Liz Rosenberg says customers appreciate the messages on the front door of the Toy Box, as they wait for her to reopen that door.

One of Liz Rosenberg’s favorite games — to both play and sell — is called Lion in My Way.

“It’s for ages 5 and up,” said the owner of the Toy Box in Amherst. “You’re presented, in card form, with obstacles, like a lion in your way, a giant wall, all sorts of things. And then you have a hand of cards that are ideas how to get past this obstacle — maybe a catapult or balloon or a sandwich to feed the lion. You have to create the story. I feel like this is the greatest game.”

And not just because she feels like she’s living it every day.

“It’s a great lesson in, ‘ugh, yes, this is awful, but what do I have in my pocket that I can use to get past the awful part and start making progress?’” she continued. “It’s all here in this game.”

Retailers across Massachusetts being told, three months ago, to close their doors indefinitely? That’s no game — but Rosenberg has been playing some effective cards.

Like morphing into a delivery service.

She recalls shuttering her shop on Sunday, March 15. “But I knew I was going to be in the next day to figure something out, and by the end of Monday, I was delivering toys,” she said. “I’ve heard a lot of people say, ‘building the airplane as you fly it.’ It felt a lot like that.”

The strategy was to offer delivery within 20 minutes of the store — which gave her some solid territory to cover without infringing too much on similar stores in the region.

“It allowed me to get in my car in the morning and drive to the store and open it up, work all day, and at 2:00 make a route map and deliver to people’s driveways, and then go home,” she explained. “I didn’t have to interact with anyone.”

She soon found this model was actually functional, and used the Toy Box’s Facebook page to showcase as many items as possible to keep customers engaged. “My website is under construction, and now isn’t the time to focus on that, and people require visuals,” she said of her Facebook photo albums.

She also spends plenty of time offering gift ideas over the phone. “I find myself absolutely cracking up, standing here trying to describe something, my hands moving, hoping they get a visual on this. It’s really entertaining.”

The result hasn’t been anywhere near normal sales volume, but it has kept the shop afloat.

“But I knew I was going to be in the next day to figure something out, and by the end of Monday, I was delivering toys. I’ve heard a lot of people say, ‘building the airplane as you fly it.’ It felt a lot like that.”

“I didn’t know what it would bring in; I didn’t really think about success,” Rosenberg told BusinessWest. “I just thought about day by day, and at the beginning of this, that’s where everyone’s head was — ‘it’s 10 in the morning; where is life going to be at 11?’”

Another card she drew on was humor — “because that’s how I live.” For example, the first day the doors were closed, she arranged a group of stuffed animals in the store window, with speech bubbles offering messages like “we miss your faces” and “we will deliver toys” and “we love you!”

“I can’t tell you the number of people I’ve seen from behind the register, taking pictures outside the front door. It makes me giggle.”

In the past couple of weeks, Rosenberg has played the curbside-pickup card — well, parking-lot pickup, “because we don’t have a curb” — and continued a popular gift offering known as ‘mystery bags,’ for which customers provide the recipient’s age and pay a discount price for a surprise assortment of goodies, such as putty, markers, stickers, mini-games, bouncy balls, and more.

“People trust our judgment on things their children or grandchildren or friends’ children might like,” she explained. “People tell me the age of the child and a couple things about them, and I put together little activities to keep them busy, keep them curious, and keep them educated. It’s gone over really well.”

Rosenberg is hoping to reopen the Toy Box in mid-June, depending on the guidance she gets from Boston, and is mulling ideas like shorter hours — perhaps half-days, or full days by appointment only — so she can manage staffing and sanitizing in a safe manner.

“As much as we’d like to be open for business, I only want to do it safely — against the virus and against unnecessary worry and anxiety,” she noted. “Anxiety is a real thing, and I don’t want people feeling forced to come into the store. So I will continue with deliveries and parking-lot pickup because, in my mind, that’s the safest way.”

One of the speech bubbles in the window reads, “we are essential.”

That may not be true in the eyes of Gov. Baker, but Rosenberg is quick to note how important it is for kids — who have, after all, been cooped up in their homes for about three months now — to experience joy through play.

“We are essential — not necessarily from the government’s perspective, but from families’ perspective. Parents are being required to stay home and work and be parents at the same time. That’s a challenge beyond all challenges. To be able to assist with that … that’s my job. I’m lucky to be in a position where I can bring some joy.”

—Joseph Bednar

Coronavirus

During Peak Season, This Area Fixture Is Making Up for Lost Weeks

Ted Hebert surveys the line outside his store — well, roughly one-third of it, anyway.

When BusinessWest recently caught up with Teddy Bear Pools and Spas owner Ted Hebert, he was surveying a line of customers around his Chicopee property that ran roughly 40 deep.

The wait to reach the premises was about 45 minutes — typical on most days recently, Hebert said, although it can reach an hour or more. And it would be longer still if the store was still letting just 10 customers in at a time, but Teddy Bear was recently approved for 20.

“We worked with the Health Department and got it up to 20 customers at a time, and we have not seen a letup since we opened on March 18,” he noted. “I’ve never seen it like this. It’s nuts.”

Compare that to the middle of March, when the governor’s orders forced Teddy Bear to close its doors.

“That didn’t really kill us because it wasn’t pool season yet. But it hurt us a little bit — we have hundreds, if not thousands, of spas and hot tubs out there, and those people do need water chemistry.”

So customers would leave water samples outside the door, and Teddy Bear employees would conduct the water chemistry and then deliver whatever products they needed to their homes — sometimes 70 or 80 deliveries a day. Hebert jokingly referred to this period as ‘TedEx.’

“We weren’t making a lot of money; we were charging 10 bucks per delivery, as far as Palmer and Monson, and we grouped them up,” he recalled. “We had a lot of fun meeting customers.”

From a safe distance, of course. In fact, Hebert put off the start of pool-installation season, which usually begins in April, out of concern for customers — not just their physical health, but their anxiety about being around other people.

“Our reputation means more to me than money, and I didn’t want to have my trucks out there,” he recalled. “A lot of customers — a lot of citizens — are scared of the unknown, so I didn’t want my trucks out there, guys doing construction, and we held off. We probably could have been out there, but we didn’t want to take a chance. So we started in May, four weeks behind.”

May brought a gradual opening of the retail store as well. “We were trying to figure out how to open, and we were able to do curbside for a few days, but it was still a lot of work. People had to go online and pay for it,” he explained.

“Our reputation means more to me than money, and I didn’t want to have my trucks out there. A lot of customers — a lot of citizens — are scared of the unknown, so I didn’t want my trucks out there, guys doing construction, and we held off.”

But then he started working with local officials — entities like the City Council, Mayor John Vieau, the Health Department, and the Police Department — on what it would take to be deemed an essential retailer so he could open the store to foot traffic. Through the city, he appealed to the governor’s office and was indeed deemed essential. The key selling point, he said, was the water-chemistry testing service.

“We ended up putting together what you see at the store now — this line with every six feet marked,” he said. “We have signage everywhere and a sanitizing station as you go in and go out.”

Meanwhile, carriages are sprayed with disinfectant after every use, employees interact with customers from behind plastic shields, Hebert himself greets people in line to answer their questions before they enter, and everyone, of course, must wear a mask. “If you don’t have one, which is seldom, we’ll offer you a free mask,” he said. “We’re doing everything we can to make it safe for them — the customers and my employees. We just want them to be healthy and safe.”

The first few days, traffic was parked up to a quarter-mile away; it didn’t help that roadwork narrowed East Street that first week. “Traffic was bad the first week, so we rented the church parking lot around the corner,” he added, noting that the store plans to make a donation to the church.

Sales of new pools are slightly down, partly because people were buying hot tubs and pools online during the shutdown — “I’m old school; I never thought I’d see that day,” he said of this more impersonal sales experience — but that’s not necessarily a bad thing, as the late start has installers scrambling. “I’m paying my guys extra to work Saturdays. I’m running 60 people servicing pools.”

And 2020 could see some later-than-normal action — as families cancel vacations, they might be inspired to invest in a backyard experience. “Even if you get a pool at the end of July, you still get four to eight weeks out of it.”

As noted earlier, the traffic subsided a little when the state approved a 20-customer capacity, but lines still regularly stretch into the dozens, as BusinessWest discovered.

“I’ve never in my life seen anything like this,” Hebert said. “But I have very considerate customers. No one’s fighting. It amazed me. They’ve been very patient and understanding.”

—Joseph Bednar

Coronavirus

Hotel Group Continues to Grow Through an Uncertain Time

Sarah Eustis

Sarah Eustis says the Berkshires has plenty to offer, even when arts and culture attractions are closed, and the Red Lion and other hotels await whatever uptick in business arrives this summer.

Sarah Eustis has some visions for the Courtyard, an outdoor dining area at the Red Lion Inn in Stockbridge.

“It will be a really active force — we’re thinking of new, creative ways to use it,” she told BusinessWest. “We’re ramping up menus, we’ll have music outside, maybe screen movies with a projector, ping-pong, cocktails … just some relaxation and fun for people in a world that isn’t very fun right now. That’s our goal.”

It’s an ambitious goal for Eustis, CEO of Main Street Hospitality, and her team as they navigate how to move forward with the group’s roster of Berkshire-area hotels while launching two more in Rhode Island, at a time when hotels are just starting to fully reopen, and no one knows how the traveling public will respond.

That’s especially true in the Berkshires, whose economy is so reliant on tourism. Several major players, including Jacob’s Pillow, Tanglewood, Williamstown Theatre Festival, and Shakespeare & Company, have canceled their summer season, and more might follow. Others are planning shortened seasons, like Barrington Stage Company, which will open on Aug. 5 with social-distancing practices in place.

Hence, Eustis’ emphasis on the other Berkshires draw: being outdoors, whether it’s hiking in nature or enjoying a breezy meal at the Courtyard.

“All the demand drivers, from a cultural standpoint, at least — with a few exceptions — have been moved to next year,” she said, adding, however, that some theaters are still looking for ways to accommodate performances, and museums are considering creative options like open, timed visitations.

But with vacation planning on hold for so many, Eustis knows she has to be realistic.

“The traditional reasons for coming to the Berkshires are massively impacted this summer, so that means we have to focus on other reasons people might come, and look at how we can provide a great experience,” she said. “We can play to the strengths of the Berkshires, which have a lot to do with being outdoors and natural beauty — we’ve got that in spades, and we will be well-served to promote that as a reason to come out and spend some time.”

Hotels weren’t forced to close by the mid-March mandate from Gov. Charlie Baker’s office, although business certainly dried up almost immediately across the country. Main Street Hospitality made decisions about its Berkshires properties on a case-by-case basis. For example, Hotel on North in Pittsfield, with its proximity to Berkshire Medical Center, has been used regularly by essential healthcare workers.

On the other hand, the Porches Inn in North Adams shut its doors completely. With little business expected there during the pandemic — it’s located across the street from the pandemic-shuttered MASS MoCA — the closure was an opportunity to tackle some needed construction and maintenance, and that site will reopen later this summer.

Meanwhile, the Red Lion Inn has maintained a robust, popular takeout program, as well as preparing meals for essential workers throughout Berkshire Health Systems and for Main Street employees who had been laid off.

“The traditional reasons for coming to the Berkshires are massively impacted this summer, so that means we have to focus on other reasons people might come, and look at how we can provide a great experience.”

Briarcliff Motel in Great Barrington and Race Brook Lodge in Sheffield were effectively closed, but have partnered with Volunteers in Medicine Berkshires to provide housing for essential workers and also people recovering from COVID-19.

“So, we’re trying to deploy each property within the mandated guidelines and leverage the characteristics of each property to the best of our ability,” Eustis said.

It wasn’t enough to keep about 300 employees working, however; layoffs reduced the company to about 25, with the discomfort spread throughout all properties and the administrative office.

“It was definitely the hardest thing I’ve ever been through as a leader, to be sure,” she said. “However, we took it week by week, with a very thoughtful approach.”

The plan now is to begin ramping the team back up again. On June 12, Main Street plans to reopen the Red Lion and Briarcliff within the safety parameters mandated by the state, as well as expanding reservations and culinary service at Hotel on North. Porches will reopen, somewhat refreshed, on Aug. 1, while two new Rhode Island properties are set to open as well: Hammetts Wharf Hotel in Newport in June 26, and the Beatrice Hotel in Providence on Aug. 9.

So, the company certainly sees a strong future.

“We are all trying to develop our strengths and skills without knowing what’s going to happen,” Eustis said. “This is the hardest thing I’ve ever had to do, but I do believe it will make us stronger as business people and hospitality providers.”

Part of that is reopening in a safe manner, with attention paid to everything from the cleaning and sanitizing strategy to what kind of voice and body language to use with guests from behind those ubiquitous masks.

“We’ve got a 40-page COVID manual guiding our preparation,” she said. “We want to check all the boxes, so when guests visit with us, they don’t have to give it a second thought. We’ve got you covered.”

As summer approaches, this should be a time of happy anticipation at a hotel group synonymous with visiting the Berkshires — but this is totally uncharted territory, Eustis said, so optimism must be tempered by reality. But she’s still optimistic.

“We will come out on the other side, although there are days it doesn’t feel that way,” she told BusinessWest. “It’s such a massive tactonic shift. But we’ve got a really talented team that’s super committed, and we will be here to tell the tale.”

—Joseph Bednar

Coronavirus

For This Photographer and Sock Maker, the Pandemic Is a Developing Story

Lenny Underwood

Lenny Underwood says both his photo studio and sock business have been greatly impacted by the pandemic.

Lenny Underwood started off by talking about how the COVID-19 pandemic has put a huge dent in both his businesses — a photography studio and an intriguing venture called Upscale Socks, which has become one of the many intriguing stories of entrepreneurship being written in the region. But then he put those losses into their proper context by changing the subject to his grandmother.

“She died from this virus,” he said slowly and deliberately for additional emphasis, as if it were needed. “Her name was Queeie Brown, and she died late last month [April] — it was awful.”

So Underwood, a member of BusinessWest’s recently announced 40 Under Forty class of 2020 — honored for his entrepreneurial exploits as well as his work within the community, such as donations of socks to area groups — has seen the virus alter his life in probably every way imaginable. Right down to his socks.

His designer socks, a venture he started dreaming about in 2014, became a reality the following year. He now has several dozen styles, including a popular ‘Springfield Firsts’ sock that came out last year and continues to draw orders. The products are manufactured by a partner in China, said Underwood, adding that production had to be halted for a time earlier this year when the virus was spreading through that country.

“I don’t foresee people having the kind of birthday parties they want to have — the sweet-16 parties or graduation parties they want to have with large amounts of people. Maybe down the road, but I’m not sure when.”

But as this year has progressed, that setback has turned out to be just one of many ways the pandemic has changed the landscape for Underwood — and perhaps one of the more minor ones.

Indeed, like most all photographers, Underwood has seen the virus rob him of a number of jobs and reliable revenue streams — everything from proms to weddings to family gatherings.

“Most of my photography is event-based, but I do some head shots and senior portraits as well,” he told BusinessWest. “Mainly, though, I’m on the scene, on location for different celebrations.”

And there certainly haven’t been many of those over the past three months, and those that have been staged have been smaller and decidedly different, he went on; after searching his memory bank, he determined that the last event he worked was the second Saturday in March.

The following Tuesday, he recalls getting seven cancellations for jobs that day alone. “I was looking forward to four proms, a lot of graduations, and weddings,” he went on, adding that he has one wedding still scheduled for late in July — and he’s somewhat dubious about that — but everything else has been wiped off the calendar.

Overall, he estimates that business is off 65% to 70% from what it was a year ago, a precipitous decline that has forced to him to seek — and eventually receive — unemployment benefits. However, they are due to run out in 20 weeks. He has also applied for a number of grants through various agencies, and is awaiting word on whether he’ll receive any.

Underwood has managed to find some work — a few of those ‘parade birthdays,’ for example, a photo shoot for a newborn, a few ‘senior-announcement photos,’ as he called them — where soon-to-be high-school grads announce where they’ll be going to college — and some other scattered assignments.

Meanwhile, the virus has generated some needed, but somewhat macabre work. Indeed, there has been a noted increase in funerals across the area, and for some of them, Underwood has been hired by families to scan photos of the deceased for slideshows and memorial tributes.

Still, like most photographers, he has seen his business devastated by the virus and doesn’t have any real idea when things might start turning around.

As for his socks … he’s still getting orders — someone recently purchased 20 pairs of the ‘Springfield Firsts’ style, for example — and some specials he’s been running have helped to generate more of them. But overall sales volume is down because he’s not able to sell them at large events, which generated a good deal of sales prior to the pandemic. Overall, sock sales are down by roughly 50%.

As he talked with BusinessWest near the tail end of May, Underwood said he had a few events on the books — an outdoor church service, for example. But the longer view is clouded by uncertainty and some doubts about whether the large events that have become his livelihood will be staged any time soon.

“I don’t foresee people having the kind of birthday parties they want to have — the sweet-16 parties or graduation parties they want to have with large amounts of people,” he said. “Maybe down the road, but I’m not sure when.”

For now, he’s maintaining his focus and looking for opportunities whenever and wherever he can find. For him, the pandemic is a developing story — in all kinds of ways. u

—George O’Brien

Coronavirus

Pandemic Poses Challenges, Opportunities for Flooring Company

Doug Mercier, right, with brother and partner Chuck

Doug Mercier, right, with brother and partner Chuck, says that, while business is off because of the pandemic, the crisis has led to some opportunities on the commercial and residential sides of the ledger.

Doug Mercier was talking about how sales for March, April, and May are off probably 30% from what they were a year ago at the flooring company started by his parents a half-century ago.

And while that’s certainly not what he had in mind for quarters one and two, he quickly put those numbers in perspective.

“Look at restaurants,” said Mercier, president of the company that bears the family name. “Many of them are down … 100%; they’re not seeing any business. This has hit us hard, certainly, but it’s actually created a few opportunities as well.”

Indeed, some institutions and businesses — from area colleges to some of those aforementioned restaurants, most already in the portfolio of clients, but some others as recent additions — have taken advantage of unwanted time and a closed building to do some work on those properties, including new flooring.

“We’ve done work for a number of restaurants in this area,” said Mercier, listing projects in several area communities. “They were sitting idle; the business was empty. Then they started cleaning and painting, and realized that the flooring really needed to be replaced.”

Meanwhile, several medical facilities have been forced to renovate or repurpose space, creating other opportunities, and on the residential side, time at home has convinced people that they need to move ahead with some planned projects, said Mercier, adding that, at this time, there are a good number of projects (again, not as many as in a typical year, but a good number) in the proverbial pipeline.

“Residential clients are calling — they’re trying to see what we can do to enable them to see samples online,” he said, noting another change in how business is being done as fewer people are willing or able to visit the showroom on Riverdale Street. “With people spending more time at home, they’re paying more attention to those jobs that need to be done.”

“We’ve done work for a number of restaurants in this area. They were sitting idle; the business was empty. Then they started cleaning and painting, and realized that the flooring really needed to be replaced.”

But, as noted, there have been a number of challenges to contend with, including the matter of taking on these commercial and residential assignments while keeping crew members safe, Mercier told BusinessWest, adding that social-distancing requirements necessitated some adjustments when it comes to when and especially how work is done.

There is also the matter of keeping those trained installers — valued employees that were a challenge to find and retain before the pandemic hit — on the payroll.

“We don’t want to lose installers,” said Mercier, noting that, thanks to a Paycheck Protection Program loan secured early last month, the company has been able to rotate crews in and out — as a safety measure, but also because there is less work overall — but still manage to pay everyone. “We’ve been doing a ‘week on, week off’ kind of thing and have kept everyone on.”

Meanwhile, Mercier, like many service businesses of this kind that are sending crews into the field, started offering employees hazard pay, an additional expense largely covered by the PPP loan funds.

Mercier was quick to note that a number of projects planned by commercial clients were shut down as the pandemic hit, including some at colleges and prep schools in this area and just outside it — Assumption College in Worcester, for example, as well as a large job at a housing project. And they are being handled now, creating more work for crews.

Meanwhile, new projects are coming into the pipeline, many in response to the pandemic itself. Indeed, he cited the example of a cafeteria in one of the area hospitals.

“They’re trying to rework the space so it will be more conducive to halting the spread of disease and bacteria,” he explained. “So they’re taking out the carpeting and putting in a more resilient surface. The pandemic has created some business for us.”

Looking ahead, Mercier sounded an optimistic note when he said he expects a relatively steady supply of work in the pipeline. He said the company recently took a few residential orders, and some on the commercial side as well.

“Since these businesses have been sitting idle, a lot of plans and blueprints have been worked on, and, looking forward, it seems like there will be an uptick in projects,” he said, adding quickly that there are number of question marks concerning the longer term, especially when it comes to the colleges.

Perhaps the best sign that better times are ahead comes in the form of the delivery trucks pulling in almost daily at the company’s storefront and showroom.

“They’re coming in fuller, and we know that’s a good sign with what’s going on with the economy,” Mercier told BusinessWest, referring to vehicles that would make several stops on a route delivering product that’s been ordered. “When the trucks arrive and there’s very little in them, you know no one is ordering. But when you see the trucks stacked pretty full … that’s a good sign.”

—George O’Brien

Coronavirus

Salon Owner Says He Missed the Relationships the Most

Bernie Gelinas said his appointment book has been full

Bernie Gelinas said his appointment book has been full, but he can’t see as many customers in one day as he used to because of strict sanitizing rules.

It may be a song lyric and a cliché, but for Bernie Gelinas, the waiting really was the hardest part.

“After we closed in March, it was hard because we really didn’t know what to expect — what the governor was going to say, and what we needed to do to reopen,” said Gelinas, owner of Cuts Plus, a small hair salon in South Hadley. “From that aspect, it was frustrating, so it was nice when he came out said they’re going to open us up.”

The nine-week closure was, in one sense, an opportunity to take on projects that had been back-burnered — a common story we’ve heard from other business owners deemed, fairly or unfairly, non-essential during the pandemic.

“While we were closed, we took advantage — we painted, we had some things done to the shop we wouldn’t have been able to do, kind of update it a little bit, because the shop is basically open six or seven days a week,” he explained. “We tried to use the time as effectively as we could.”

Gelinas wasn’t the only one affected, of course — three full-time stylists and two part-timers in his salon were out of work, too, and while he was able to access a tiny piece of the federal stimulus, it wasn’t nearly enough to make up for the lost weeks. So May 18 — the day Gov. Charlie Baker said salons could open the following Monday — was a good day.

“We got the news like everyone else,” he said. “We watched the governor’s press conference online. On our time off, I listened to his briefings every afternoon and tried to read into what he had to say. And when we learned we were going to reopen, we had a week to somewhat prepare.”

“The big test will be in three or four weeks, once we’re caught up, to see where business goes from there. We’ll see at that point how many clients we have back and how many are holding out. It’s a wait and see.”

And prepare he did. There’s no waiting area at Cuts Plus right now — the furniture is gone — because no one is allowed to wait; only one customer per stylist is allowed inside. The bathroom is closed off, too.

“We put reminders on the walls — that was part of the protocol, to post things to remind people to be aware of their surroundings; we complied with that,” he said. “And we took out the magazines and anything else that would encourage customers to touch things that other people touch. We realigned the shop as much as we could.”

Part of that realignment was moving one booth — typically used by one of the part-timers — to a different room, one normally used for nails, a service that salons can’t offer yet. “There’s more planning involved, more careful scheduling to have the minimum amount of people here,” he said — and keep as much distance between them as possible.

That doesn’t apply to the stylist and his or her customer, of course — no one’s cutting hair with six-foot-long scissors. That’s why everyone wears masks, and why Gelinas can’t trim facial hair, for the most part. He says working around the mask straps while trimming was an adjustment, especially since masks come in several different configurations, but he has adjusted.

When asked if he’s been busy, he offered a measured “yes, but no.”

Elaborating, he explained, “when we reopened, we had to spread people out — it takes longer in between customers to follow the protocol, which is fine because it’s for the safety of all. We’re always wiping down things, and every three to five haircuts, I’ve got to take everything out and sanitize the whole station. I sanitize the doorknobs throughout the day, wipe down any common areas, wipe down the tables.”

At the same time, a good deal of his customer base has been clamoring for haircuts after more than two months away, so his schedule has been packed.

“We’re trying to get people in and take care of them and get them back on track,” he told BusinessWest. “The big test will be in three or four weeks, once we’re caught up, to see where business goes from there. We’ll see at that point how many clients we have back and how many are holding out. It’s a wait and see.”

That’s because not everyone has called back, and older customers in particular may be hesitant to sit in the chair. “That’s perfectly sensible,” he noted.

That said, customers have been “phenomenal” when it comes to following the new guidelines. And they’ve made Gelinas consider what he was missing during the weeks when he couldn’t cut hair.

“The beauty of coming back to work is you realize all the relationships you build throughout the year. You miss those people, and when you finally see them and talk to them, you realize that’s what this business is all about — it’s not just giving haircuts, but more the one-on-one. It’s more than a professional relationship; it’s very personal. You kind of miss that.”

In fact, it made him realize that, when he eventually retires from his full schedule, he’ll still want to cut hair.

“So it was a learning experience for me also. Yes, we used those weeks as best as we could, to do different projects. But it was a mental project, too — to kind of answer the question of what the future will bring. It’s one of those things where you don’t miss it until it’s gone.”

—Joseph Bednar

Coronavirus

Restaurant Owner Says Reopening Will Be Exciting, but Scary, Too

Eastside Grill’s new outdoor seating area

A new mural starts to take shape in Eastside Grill’s new outdoor seating area, as restaurants anticipate outdoor seating becoming much more prominent under state reopening guidelines.

There’s a little alleyway beside Eastside Grill in Northampton that used to hold a few dumpsters and parked cars, but not anymore — it’s been converted into an outdoor dining space. Last week, local artists painted a mural of the Big Easy there, to reflect the restaurant’s New Orleans influences.

Reopening the restaurant’s doors is certainly big. But nothing about it has been easy.

“When they shut us down, I’ve never been so anxious in my life,” owner Debra Flynn said. “This is my life. This is my employees’ life; they depend on this income to pay their bills. It was really scary at first, and it still is, actually, because we don’t know what’s going to happen once we open up. We won’t be making as much money as we once did, and there are so many restrictions. What’s going to happen when we open?”

For that outdoor seating area, Flynn has a bistro feel in mind, with eight high-top tables, spaced at least six feet apart, that seat two diners each; she doesn’t want more than two to a table at first. The space is adorned by large donated urns, and local landscaper Justin Pelis donated some plants.

“Everyone has really come together,” she said. “I have an incredible staff. The executive chef has refined the menu to keep costs down, yet it’s creative and inventive, and my general manager has been running back and forth to Restaurant Depot to get things we need.”

They’ve both been multi-tasking for some time; in fact, a team of only four, including Flynn, have been maintaining a robust curbside-pickup and delivery service five days a week since early in the shutdown.

“It was very popular,” she said, before drawing on some hyperbole. “We went from zero to a million in two seconds. We’ve never done anything like that, and that first week we opened, we were going very quickly.”

At first, the restaurant offered its fare through curbside pickup — the customer would pay over the phone, and the food would be handed through the passenger-side window — or delivery, to Northampton destinations initially, but that’s being expanded to Hatfield, Florence, Leeds, and Easthampton.

“I don’t know if delivery is ever going to go away,” she added. “For people who don’t want to sit at a table, they can take it home. Especially for the elderly, it’s been great.”

Flynn was able to access a Paycheck Protection Program (PPP) loan, but even that was fraught with anxiety.

“No one was telling us how it worked; nobody knew anything,” she said, adding that she was thrilled when the PPP guidelines were changed last week, extending their use by an additional eight weeks — which is critical for restaurants that had little or no work available for their teams over the first eight weeks of the loan.

She had the aforementioned skeleton crew making and delivering takeout, but what about the bartenders? “The bar is closed right now — sure, you can take out beer and wine in bottles, but you don’t need a bartender to grab a bottle. The bar won’t be open until phase 3 — maybe phase 4. No one’s allowed to set up a bar.”

When the governor says restaurants can open, Eastside’s hours will shift again, to Wednesday through Sunday, with a longer day on Sunday: noon to 8 p.m., marking the first time Eastside Grill has effectively served lunch.

“I cannot wait to reopen, even if it’s going to be 16 seats on one side of a small patio. It just generates people being out and being happy and being able to have a drink again — come in, have a cocktail, have an appetizer and dinner, and relax.”

It’s all part of being creative at a difficult time, one she knows isn’t exclusive to restaurateurs.

“Retailers are having it bad, too,” Flynn said. “With curbside pickup, nobody can try anything on because they can’t go into the building. So retailers have it as bad as restaurants do.”

Still, she noted, the restaurant industry is in many ways unique in the challenges it will face when it can once again serve guests.

“I cannot wait to reopen, even if it’s going to be 16 seats on one side of a small patio,” she said. “It just generates people being out and being happy and being able to have a drink again — come in, have a cocktail, have an appetizer and dinner, and relax.”

After all, dining out is an experience, one that can’t be replicated by takeout food, no matter how tasty.

“It’s the feeling of being served — that’s what it’s all about,” she told BusinessWest. “We were never a takeout business, and it took a while to make the food look nice. We’re used to putting it on a plate and making it look appetizing. Takeout is a whole different ballgame; people eat with their eyes, and a lot of times takeout doesn’t look as pretty.”

Flynn was quick to add, however, that the takeout ‘plating,’ if one could call it that, did begin to look nicer as the weeks wore on. Not as good as reopening the doors will look, when she and her team can begin serving up that New Orleans culinary spirit in person once again.

—Joseph Bednar

Coronavirus

Supply Chain of Events

By George O’Brien

Supply chain.

That’s a two-word phrase that had rarely made its way into the lexicon of most area residents before the COVID-19 pandemic; it was generally assumed that the shelves in the stores would be crammed with product — because they always had been.

But in a year when there have been shortages of cleaning supplies, surgical masks, beef, fish, hair coloring, paper towels, ice cream, rice, frozen pizza, and, yes, toilet paper — a product that has become a metaphor for a crisis — people can no longer take supply chain, and full shelves, for granted.

This has been a learning experience — on a number of levels.

So too for those who work to keep the shelves stocked. For them, it’s a time of relationship building, finding new ways of doing things, and providing ongoing proof that, while the supply chain has been bent — severely and repeatedly — it hasn’t, in their minds, been broken.

Michael D’Amour

“The supply chain has definitely been tested through all this, and there have been shortages of some things, as everyone knows,” said Michael D’Amour, chief operating officer at Springfield-based Big-Y, the fourth-generation, family-owned grocery chain. “But, overall, I think this crisis has shown just how resilient the supply chain is.”

Doug Baker, vice president of Industry Relations for the Food Marketing Institute, (FMI) agreed.

“Almost weekly we’re getting back numbers, and we’re still seeing double-digit growth across many categories — and you can’t have double-digit growth if inventory is not available,” he said, referring to specific product lines ranging from cleaning supplies to frozen foods. “It’s just a matter of matching inventory with consumer demand, and that’s been the challenge.

Doug Baker

“And that’s why we’ve seen shortages — because that inventory output hasn’t been able to rise to the level of consumer demand,” he went on, adding that recent numbers show a slowing of demand that is giving many producers at least a chance to catch up.

In March, on average, the industry was seeing 35% to 40% increases in overall sales volume, Baker said, while in late May, the number was closer to 20% to 25%.

“We’re seeing sales slow, which is helpful because it allows the supply chain to catch up to an extent,” he explained. “But we also have to understand that those are still pretty significant increases, and we’re not going to go back to pre-COVID days, because the public still has yet to engage in a livelihood that they engaged in before the pandemic, and that’s based on where you see them spending their food dollar.”

D’Amour agreed, noting that, as May turned to June, a good number of people were still in something approaching lockdown mode. They were eating most meals at home because restaurants were only open for takeout. They were also still working at home and, therefore, eating lunch at home. Meanwhile, children are home from school, and college students are home as well. This all adds up to people buying more at the supermarket.

As phase 2 of Gov. Charlie Baker’s reopening plan takes effect on June 8, restaurants will be opening for curbside dining, and preschools and day camps will be reopening. And as more and more people go back to their offices — the ones they left in March for space on their dining room table — the ratio of food dollars spent out of the home will start to rise higher.

How long it will take to reach pre-COVID levels — when 54 cents of each dollar was spent outside the home — remains to be seen, said Baker. However, what is certain is that the situation is fluid at best and it could change in a hurry if cases start to surge, a second wave arrives, and people start spending more time working — and eating — at home.

Meanwhile, this new normal has essentially forced chains like Big Y to forge new alliances with suppliers, said D’Amour, noting that as restaurants, colleges, and schools of all kinds closed earlier this year, this created an enormous surplus of inventory, but put the demand on grocery stores, while also creating an opportunity to redeploy goods and resources to grocery retail to meet demand and reduce waste.

One such alliance, one that typifies how suppliers and grocers are working together to forge solutions, involves Little Leaf Farms in Shirley, a local partner and grower of lettuce that saw demand decline dramatically as schools and restaurants closed a few months back and was looking for new opportunities to sell product and reduce the kind of waste that was seen almost nightly on major news broadcasts.

“They’re one example of so many local partners who have sat down with us and worked to figure out how to maximize business between us and keep their stuff growing and moving through the pipeline when the restaurants were shut down,” D’Amour explained. “We worked with them on supply and hotter deals and pricing to keep it moving through the grocery channels.”

For this issue, BusinessWest talked with several players involved with supply chain about the lessons learned to date and how they will help the broad food industry through the uncertain months to come.

Food for Thought

As noted earlier, the laws of supply and demand generally take care of shortages on store shelves — in normal times.

But these are not normal times, said those we spoke with. Still, those laws have applied to items like surgical masks. Hard to find only six weeks ago, they are now seemingly everywhere, and in large quantities, as a number of companies started making them — and more of them.

“Everyone’s getting into the mask business now,” Baker explained, adding quickly that it’s much easier to convert machines to make those products than it is to supply more canisters of Lysol or make more rolls of toilet paper, as simple as that might sound.

“Paper manufacturers have been putting in additional lines,” he said. “But the challenge the industry is facing now is that there two types of fiber used to make toilet paper — there’s recycled fiber and there’s virgin fiber, and with recycled fiber, the supply is low, and not every machine can be converted to use virgin fiber, so you’re going to have less output if you can’t convert.”

And sometimes, because of the pandemic, producers simply cannot meet demand.

That was the case for several weeks — although matters have improved — when it came to supplies of meat and chicken, said Baker, noting that, early on, plants were shut down temporarily. And when they reopened, to keep workers safe, production lines were altered in ways that actually slowed production.

Such specific cases help explain shortages of particular items, said those we spoke with, adding that, overall, many of the empty shelves result from unprecedented demand and panic buying that is starting to wane in many instances. But as the year continues, more lessons will certainly be learned, said D’Amour, adding that there have been plenty of learning experiences already.

Elaborating, he said that, from the beginning, those at Big Y have been watching what’s happening globally, anticipating, and “trying to get on top of things” — a phrase he would use many times — when it comes to everything from employee and customer safety to creating efficient traffic flow in the stores, to keeping items on the shelves.

This has obviously led to new policies and procedures — from the directional arrows on the floors to special hours created for seniors to the plexiglass screens at the check-out counters.

“For us, the biggest component is the people part, and that continues to be stressed by our suppliers, wholesalers, and others,” he said, adding that, while much of that panic buying and hoarding is being talked about in the past tense, the need for diligence remains, and chains like Big Y can’t let their guards down.

Getting back to the supply chain, D’Amour said it has been a struggle in some well-documented areas, but suppliers are responding by trying to increase supply and also reduce the number of overall SKUs to help put some product on the shelves.

“Where people are used to walking down the paper aisle and seeing 150 different choices of bath tissue and paper towels, now they’re seeing far fewer,” he said. “But products are coming back; we’re working with all our partners to get them back in.”

Perhaps the biggest key to providing quality service to customers during the crisis has been efforts to forge new partnerships and stronger relationships with those within the food-service industry, said D’Amour. He mentioned ongoing work with Springfield-based Performance Food Group as one example.

“They’ve done a phenomenal job working with us, working together, to figure out what food they have stuck in the pipeline that we can use,” he explained, adding that, over the past several months, PFG, as it’s called, has even helped with trucking and labor for either Big Y’s warehouse or at wholesale partners. “Most of these partnerships we’ve had have been mutually beneficial, but there are strategies and tactics that we’ve never done before; everyone’s been very open and ready to fight the battle, work together, and think of new ways to partner for the benefit of the consumers.”

Paul Sellew

Which brings him to Little Leaf Farms. Paul Sellew, owner and founder of that facility, which began operations just four years ago, said it is now part of a larger local-food movement that not only puts fresher produce on the shelves, but in many ways helps ease flow of product through the supply chain.

“People don’t realize that 95% of the leafy greens that you see in the grocery store are grown in California and Arizona,” he explained. “And when you have this global pandemic, an unprecedented situation, that puts stress on the supply chain, so imagine managing a supply chain from Selinas, California to Springfield, as opposed to my supply chain, from Devens, Mass. to Springfield.”

Little Leaf has historically seen much of its business fall into the broad category of food service — restaurants, schools, and other institutions. But with the pandemic and the sharp decline of demand on that side, the company, like many other suppliers, has shifted into retail grocery, which has been a win/win/win, for those growers, the grocers, and, ultimately, consumers.

“When you get these unprecedented events, you really want to make this region stronger and more resilient, and food is such a strong, fundamental component of that,” he went on. “And that’s why we’re so grateful for partnerships like the one we have with Big Y, which has supported us from day one.”

Overall, there is a ‘new normal’ within the grocery/food-service industry, a phrase now being heard in virtually every sector of the economy. It involves a landscape that could change quickly and profoundly depending on the pandemic and its impact.

No one really knows when there will be real light at the end of the tunnel, said D’Amour, adding that Big Y, like all those it is partnering and working with, needs to remain nimble and flexible, and continue to work in partnership with others to not only keep the shelves stocked, but also keep people safe.

Bottom Line

Summing up the past several months, those we spoke with said it’s been a challenging and in many ways difficult time, where, again, many important lessons have been learned that will serve consumers, suppliers, and retailers well in the uncertain months still to come.

“The United States is a country of abundance, and the supply chain is a beneficiary of this abundance,” Baker said. “Yes, the supply chain is strained, and some shortages will be experienced, but it’s not broken — there are not critical disruptions in the supply chain.”

The hope, and the expectation, said D’Amour, is that things will stay that way.

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

Coronavirus Cover Story

Baby Steps

After more than two months of a widespread economic shutdown, Massachusetts is opening its economy again — sort of. The plan, announced by Gov. Charlie Baker on May 18, allows some businesses to open their doors under tight health restrictions, while others — including restaurants, spas, and most retail — have to wait longer to invite the public inside. What’s got businesses frustrated is not knowing exactly when their turn will come — and the financial impact they continue to endure every week they have to wait.

Massachusetts is the 15th-most populous state in the U.S., yet, the day Gov. Charlie Baker released his economic reopening report, it had reported the fourth-most total COVID-19 cases in the country.

So, the reopening was never going to be a free-for-all.

“We were all very aware that, no matter what we went forward with, there will be more infection and more deaths,” said Easthampton Mayor Nicole LaChapelle, one of 17 members of the governor’s Reopening Advisory Board. “While the public-health metrics are numbers, statistics, they’re also people — they’re your neighbors, maybe your mother or father.

“People want to open,” she told BusinessWest, “but they don’t want to put people at risk — themselves, their customers, their parents. The compassion is remarkable.”

That’s why it was no surprise that Massachusetts is reopening slowly and cautiously. Last week, manufacturing facilities, construction sites, and places of worship were allowed to return under strict guidelines (more on those later), and on May 25, the list will expand to offices (except in Boston) and labs; hair salons, pet grooming, and car washes; retail, with remote fulfillment and curbside pickup only; beaches, parks, drive-in movies, and some athletic fields and courts; fishing, hunting, and boating; and outdoor gardens, zoos, reserves, and public installations.

That covers what Baker is calling phase 1, with three more reopening phases to follow. Conspicuously not on the phase-1 list? Restaurants, spas, daycare centers, in-store retail … it’s a long list. And, for many business leaders, a frustrating one.

Nancy Creed

Nancy Creed says businesses in phase 1 got the clarity they were seeking, but those in phase 2 are still waiting.

“There’s certainly an appreciation for public health, but there also needs to be some common sense, and I think it’s very hard to explain why it’s OK for 200 people to be in line at Home Depot, but a small, downtown store can’t have two or three people in it,” Rick Sullivan, president and CEO of the Economic Development Council of Western Massachusetts, told BusinessWest.

“Certainly everyone has to be smart,” he added, “but I think there needs to be more common sense brought into the reopening. I appreciate where the governor is — the balancing act — and I think the reopening committee did a great job with outreach, but there needs to be clear guidance and some common sense.”

Others were less diplomatic.

“While protecting public health is important and something we all support, it defies logic to declare that the opening of barbershops and hair salons is safe, while claiming opening small retail businesses is not,” Jon Hurst, president of the Retailers Assoc. of Massachusetts, said in a statement.

“The same is true for the opening of churches and large office buildings,” he went on. “Having two or three people in a retail shop is every bit as safe, if not safer, than the allowable businesses in phase 1. The Baker administration has consistently picked winners and losers during this crisis, and it is disappointing to see that trend continue in the reopening plan.”

As president of the Springfield Regional Chamber, Nancy Creed has been in touch with her members for almost three months now on the impact of the COVID-19 pandemic. She, like Sullivan, understands the delicate balance the state is walking.

“When we were part of the presentation to the advisory board, the last thing I said to them was, ‘our businesses are struggling, but they are surviving this. What they can’t survive is for it to happen again.”

“Certain sectors thought they’d be in phase 1, so there’s always that frustration,” she told BusinessWest. “When we were part of the presentation to the advisory board, the last thing I said to them was, ‘our businesses are struggling, but they are surviving this. What they can’t survive is for it to happen again. So we need to be smart about it and make sure we’re doing everything we can so the reopening is successful, and this doesn’t happen again.’”

She knows that’s not easy for many small businesses to hear, particularly ones with no revenue stream at all during this time.

“This is different for everyone, but businesses are muddling through it, pivoting, doing the things they need to do for basic economic survival,” she added. “But if it happens again, I don’t think we’ll survive the second round.”

Hence, baby steps, and a multi-phase reopening that offers real hope for many sectors, but continues to draw no small amount of criticism as well.

Guidance — and Lack Thereof

According to Baker’s plan, each phase of the reopening will be guided by public-health data that will be continually monitored and used to determine advancement to future phases. The goal of a phased plan is to methodically allow businesses, services, and activities to resume, while avoiding a resurgence of COVID-19 that could overwhelm the state’s healthcare system and erase the progress made so far.

Each phase will last a minimum of three weeks and could last longer before moving to the next phase. If public-health data trends are negative, specific industries, regions, or even the entire Commonwealth may need to return to an earlier phase.

Nicole LaChapelle

Nicole LaChapelle

“When talking to businesses and different groups and unions, the question was always, ‘what are the barriers right now, what are your biggest challenges, but more importantly, what do you need to see happen in order for your industry to open, and what is the timeline for that to happen for you?’”

In addition, success in earlier phases will refine criteria for future phases, including travel, gathering sizes, as well as additional openings in retail, restaurants, lodging, arts, entertainment, fitness centers, museums, youth sports, and other activities.

“Going in, the goals were, how do we safely and slowly open the Massachusetts economy?” LaChapelle said. “And that is directly tied to public-health metrics. When talking to businesses and different groups and unions, the question was always, ‘what are the barriers right now, what are your biggest challenges, but more importantly, what do you need to see happen in order for your industry to open, and what is the timeline for that to happen for you?’”

It was helpful, she explained, to seek input from myriad sectors and businesses — those deemed essential and never forced to shutter; those that had to pivot, such as retailers boosting their online presence and manufacturers shifting to making masks and face shields; and businesses that have been effectively sidelined.

“The board, at no point, even at the beginning, was like, ‘let’s get this thing going and roll it out immediately,’” she added, noting that she understands the need for companies to start ramping back up. “They may be a little disappointed, but they’ve been very understanding. There’s some education we have to do, but nobody is really upside-down about it.”

In order to reopen, businesses must develop a written COVID-19 control plan outlining how its workplace will prevent the spread of the virus. They must also create and display posters and signs describing rules for maintaining social distancing, hygiene protocols, as well as cleaning and disinfecting.

“I think there needs to be an appreciation for restaurants and small Main Street businesses that are not going to be able to just comply with the state’s protocols immediately.”

Sullivan appreciates the attention to public-health concerns, but said it offers little comfort for businesses stuck in an as-yet-undefined phase 2 — or beyond. While the reopening plan gives clear guidance for businesses in phase 1, those in phase 2 don’t even get a target date they can work toward or a set of protocols they can begin to develop. And that lack of clarity has led to frustration.

“I do think many businesses, especially smaller businesses, were kind of expecting more things to open up,” he said. “I think there needs to be an appreciation for restaurants and small Main Street businesses that are not going to be able to just comply with the state’s protocols immediately. They’ll need to plan, order some equipment, and spend some time reorganizing their business, because it’s going to be different than it was pre-COVID. And it’s not something they can do overnight. Many businesses are just looking at lead time — they want to open sooner than later, but they want lead time so they can be ready to go.”

Creed agreed.

“I think what businesses wanted, at least in the beginning, was some clarity about the guidelines, about the timelines, about the standards, about the checklists, all those things, so they can create their own plan — and that was achieved, at least for phase 1,” she explained. “But I am hearing the phase-2 people saying, ‘well, I wanted to be able to plan, but I don’t have enough guidance right now,’ so there’s some frustration.”

The Massachusetts Restaurant Assoc. said as much in a statement following the plan’s release.

“Obviously, every restaurateur is disappointed with the lack of a defined reopening date in today’s announcement,” it noted. “Massachusetts restaurants need their suppliers to have time to restock perishable inventory before it can be delivered to them. They need to notify employees about returning to work and conduct other due diligence to ensure restaurants can open effectively.”

Safety and Numbers

Across Massachusetts, the reopening plan sparked a spectrum of reactions, all acknowledging the competing health and economic interests in play, but expressing different levels of understanding and frustration — and often both.

“We realize that every employer in Massachusetts would love to hear that they can reopen immediately. But we also acknowledge that a phased reopening balances the need to restart the economy with the need to manage a public-health crisis that continues to claim 100 lives a day in Massachusetts,” John Regan, president and CEO of the Associated Industries of Massachusetts, noted in a statement.

Even as some businesses start to reopen and others plan to do so, the state Department of Public Health updated its stay-at-home advisory, replacing it with a new “Safer at Home” advisory, which instructs everyone to stay home unless they are headed to a newly opened facility or activity. It also advises those over age 65 and those with underlying health conditions to stay home, with the exception of trips required for healthcare, groceries, or that are otherwise absolutely necessary. All residents must continue to wear a face covering in public when social distancing is not possible, and individuals are advised to wash their hands frequently and be vigilant in monitoring for symptoms. Restrictions on gatherings of more than 10 people remain in effect.

The state also encourages working from home when possible, and Baker’s office released a list of 54 large companies — employing about 150,000 workers among them — that have issued statements extending work-from-home policies for the remainder of the spring, with numerous reporting intentions to extend into the summer and, in some cases, for the remainder of 2020.

“As MassMutual develops our plan to gradually return to the office, the health and safety of our employees is our top priority,” said Roger Crandall, chairman, president, and CEO of MassMutual, noting that his employees will return to the office no sooner than the beginning of September.

“We expect to come back in a slow, phased manner,” he added. “We will continue to monitor and reassess and will be factoring in a number of considerations — from federal, state, and local government and health officials’ guidance to a sustained reduction in cases in our operating locations, to broader available testing and our employees’ personal circumstances and comfort.”

Patrick Sullivan, Massachusetts President of People’s United Bank, is also promoting continued work from home where possible.

“People’s United Bank is assessing re-entry conditions and protocols to ensure the safety of our team members and our customers,” he said. “Our approach will balance the needs of employees with the needs of the business. As we have been successful in pivoting and adjusting to working from home, we will continue to encourage this behavior.”

Still, those are businesses that can at least operate in most aspects. Retail stores can’t so easily adjust — and have been devastated by the inability to invite shoppers into their stores.

“We are incredibly disappointed with how Governor Baker has treated retail businesses throughout the health and economic crisis. Massachusetts has been one of the most hostile states in the nation toward small retailers.”

“We are incredibly disappointed with how Governor Baker has treated retail businesses throughout the health and economic crisis. Massachusetts has been one of the most hostile states in the nation toward small retailers,” said Hurst, noting that Massachusetts stores are losing Memorial Day weekend at a time when other states have let them open up shop by now. “Retail businesses are ready and able to open safely now with a limited number of people in stores and for appointment shopping. By not allowing that until late June, many small, Main Street businesses will close forever.”

That’s not hyperbole for small businesses of many kinds. Matt Haskins, who operates the popular Matt’s Barber Shop in Amherst, said a recent grant from the Downtown Amherst Foundation has helped him stay afloat at a time when he doesn’t know when college business will return.

“Just five minutes before [receiving word of the grant], I was on a phone call discussing if Matt’s Barber Shop was going to make it or break it,” he told foundation officials. “The grant helps me think we’re going to make it.”

So will being able to open his doors again on May 25. And that’s all most business owners want right now — a target. Creed hears that, but at the same time, she’s encouraged by recent chamber polling suggesting the percentage of business owners who feel they’ll survive this crisis is rising.

“What that says to me is people are finding a way to make sure it doesn’t put them out of business,” she said, “which shows the resilience of the businesses we have here.”

Yes, they have resilience, in spades. Now, they want clarity — and some hard dates.

Joseph Bednar can be reached at [email protected]

Coronavirus Special Coverage

Q & A for the Reopening

By Ellen McKitterick and Mark Emrick

Employers are beginning to look at bringing employees back into the workplace and/or opening up their offices after being closed for six to eight weeks. Here is a sampling of the key questions that the HR Hotline staff at the Employers Assoc. of the NorthEast (EANE) is responding to.

Ellen McKitterick

Ellen McKitterick

Mark Emrick

Mark Emrick

How do I respond to an employee who says they are afraid to return to work? Each instance needs to be looked at on a case-by-case basis. If the employee has a valid reason that fits within an FMLA, ADA, or other reasonable accommodation, then be sure to start the interactive process and see if the request is reasonable. Otherwise, general fear is not a valid reason, and the employee would be voluntarily resigning.

How do I respond to an employee who says they don’t feel safe returning to the workplace? Assuming you have taken all required cleaning and disinfecting steps, you can respond: “we are operating a safe workplace. We are operating in accordance with state and local safety and health guidelines. There currently is no recognized health or safety hazard in our workplace.” Otherwise, general fear is not a valid reason, and the employee would be voluntarily resigning.

As we ramp up our operations, we need our workforce to return to the physical workplace. How do I respond to an employee’s request to continue working from home? Employers do not have to permit work from home if it does not fit their business needs; it is not up to the employee. That being said, in our current crisis, it is wise to allow working from home until the COVID-19 situation is under better control.

What if I can only bring my employees back part-time? They have been on unemployment during their furlough. How will this affect their ability to collect benefits? Employees who are collecting any benefit from unemployment insurance (UI) will continue to receive the additional $600 from the federal government at least through July 31. Partial unemployment may still qualify them for some UI; there is a partial-payment calculator at mass.gov to determine the possible benefit.

Can my employees continue to collect unemployment after I have asked them to come back, but they refuse? They can try, but they are not eligible if you have offered work. Employers should notify the Department of Unemployment Assistance of any employee refusing to return.

What do I do if my employee says they are making more money on unemployment than working for me and do not want to return right away? The employee needs to make a decision. Either they take the short-term gain of extra unemployment or the long-term gain of their job. This would be considered, in most cases, voluntary resignation. Their position may not be available when they decide to return to work.

What effects does our recent furlough have on my employees’ flexible spending account and dependent care accounts, the loss of contributions, and amount of time remaining for contributions in 2020? Employees may be allowed to make changes to some accounts, but it would require an amendment to your plan. IRS Notice 2020-29 may answer more questions.

Can I screen or test employees for symptoms of COVID-19 before they return to work? What screening methods should I use? Yes, during a pandemic you can take employees’ temperatures or ask business-related health questions such as “have you had symptoms, a fever over 100.4, or been in contact with someone diagnosed with COVID-19?: Remember that HIPAA and privacy laws apply.

Can I require older workers who are at high risk to continue to stay at home? No, you cannot exclude anyone in a protected class. If they voice a concern, then you should enter into the interactive process and see if a reasonable accommodation may apply.

Do I have to provide face masks for my employees? In Masachusetts, employees will be required to wear them at work, but it is to be determined who has to provide them. Neighboring states are all requiring the employer to provide needed personal protective equipment.

How do I respond to any employee who refuses to adhere to our social-distancing guidelines or wear a face covering in the office? Upon return to work, employers should put employees on notice of any new policy, any special protocols that may apply, and the personal protective equipment that is required. Engage in an interactive process to ascertain any concerns and determine if special conditions may apply before moving to discipline.

What should I do if my employees are complaining about coming back to work and the extra requirements? Employees are entitled to complain about working conditions to fellow employees. They should remain professional and follow all company policies, but they have the right to voice their opinion as long as they are not defamatory or causing disruptions.

Ellen McKitterick is EANE’s newest HR business partner. She advises member organizations on all aspects of employment law, including wage and hour issues, employment discrimination, employee benefits, leaves of absence, and unemployment, and trains EANE members and non-members on harassment prevention, basic employment concepts, employee medical and leave issues, and key management skills. Mark Emrick is a senior HR business partner at EANE with consulting responsibilities for all aspects of the HR function — recruiting, interviewing, hiring, training, benefits administration, compliance, performance management, coaching, development, corrective action, and terminations. He is also an experienced investigator for employee complaints and issues.

Coronavirus Features

The Questions Keep Coming

The Paycheck Protection Program (PPP) was created by the CARES Act to provide forgivable loans to eligible small businesses to keep American workers on the payroll during the COVID-19 pandemic. The SBA recently provided updates to its PPP guidance and also released the form application for PPP loan forgiveness, which will help small businesses seek forgiveness at the conclusion of the eight-week covered period, which begins with the disbursement of their loans.

Here are five common questions area attorneys have been hearing from business owners concerned about how PPP funds may be used in order to be forgiven.

Where can I spend my PPP loan in order for it to be forgiven?

“You’ve got to use 75% of what was loaned for payroll purposes,” said Kathryn Crouss, shareholder with Bacon Wilson. “Obviously, that’s salaries and wages, but other money employers spend on payroll costs count as well — vacation pay, parental or family leave, paid sick leave, or if there’s an employer match for plan premiums. So the definition of ‘payroll costs’ is relatively broad.

“The remaining money can be spent on other approved expenses — keeping the lights on or mortgage or rent or utility bills, those sorts of things,” she added. “Assuming you can prove to the government that you have spent 75% of the loan on qualified payroll expenses and the remaining portion on other qualifying expenses, then the loan should be forgiven and becomes a grant rather than a loan.”

In addition, she added, “if an employer brings an employee back on and that employee used to make, say, $3,000 a month, if they pay them less, they have to be within 75% to be forgiven. That’s not true for head count — they still have to have the same number of employees; not necessarily the same people, but the same head count.”

How do you measure whether an employee’s salary or wages were reduced by more than 25%?

“This may be the area that was causing the most angst among business owners, since it seemed mathematically impossible to not have reduced compensation by at least 25% if you were comparing compensation in the first quarter of 2020 — 13 weeks — to the covered period of eight weeks,” said Scott Foster, partner with Bulkley Richardson. “Fortunately, the SBA has opted to focus only on either the annualized salary for exempt employees, or the average hourly wage for non-exempt employees. Also, with respect to the salaried employees making more than $100,000 per year during the first quarter, as long as the annualized salary remains above $100,000 during the covered period, then any reduction in salary is not considered a reduction under this test.”

What about employees that were furloughed or laid off, but now refuse to return to work?

“For any employee the business has offered to re-employ in writing, and the employee (for whatever reason) refuses to accept re-employment, this will not reduce the loan-forgiveness amount,” Foster said.

Amy Royal, CEO of Royal, P.C., noted that she’s had many questions of this type. “They’re asking, ‘if I want to make sure I get loan forgiveness, how do I address a situation where I’ve offered to bring people back and they’ve said, thanks but no thanks?’ Obviously, those people have their own unemployment issues because if they’ve been offered a job and continue to take unemployment benefits, that could, in certain circumstances, be fraudulent.”

As for the employer, “if you make a good-faith offer to rehire someone with PPP money, make sure that offer is in writing,” she added. “If the employee rejects the offer, make sure you, as a business, have documented that. It will help you when you apply for loan forgiveness. That issue has been a real concern.”

Crouss agreed, noting that some employees may have legitimate reservations about returning to work — for instance, because they have a 95-year-old parent and don’t want to infect them.

“Make sure that conversation is in writing,” she said. “If they say they can’t return, get that response in writing as well, save that correspondence, and put those documents in their personnel file. Where we’re heading is, the head-count piece may be forgiven if they have that kind of documentation.”

Interestingly, Foster noted, “the application states that any employee fired for cause during the covered period does not reduce the borrower’s loan forgiveness. Oddly, this could mean that an employee that was fired for cause prior to the covered period would still count as a missing FTE during the covered period.”

My employees have nothing to do until my business is allowed to reopen and ramps back up. What if I want to save the PPP funds for after the eight-week period?

For example, Royal said, “if you’re a restaurant, you’re not open now. Maybe, if you’re lucky, you’re doing takeout, but the bulk of your business is full service. So the timing has presented issues because they can’t be fully ramped up now, but they’ve got to avail themselves of the funds right now before they run out.”

Businesses may absolutely hang onto the money and use it beyond the eight-week window, she explained — but they will have to pay it back over two years with 1% interest.

“That’s a very attractive loan,” Crouss noted. “Many businesses are making that decision — which is a perfectly sound decision. This only goes for eight weeks, and when you get that amount of money, it should cover your payroll for eight weeks, but what happens if the world hasn’t righted itself? So maybe it makes sense to save it for a rainy day and think of it as a loan and not a forgivable grant.”

Do I have to claim the PPP loan as income?

“The good news is, the IRS has spoken and said no,” Royal said. However, expenses paid for with PPP funds are also not deductible. “That makes sense — you can’t double dip. The way I conceptualize this is, it didn’t happen. We’re going to pretend this period didn’t happen for tax purposes.”

—Joseph Bednar

Coronavirus Features

Unwanted Break in the Action

By Mark Morris

Thunderbirds

Nate Costa says the Thunderbirds were on track for their most successful season when it ended prematurely.

When discussing the impact COVID-19 has had on the AHL’s Springfield Thunderbirds, team president Nathan Costa doesn’t mince words.

“There’s no way to sugarcoat this — it’s a challenge, and it stinks,” he said, noting that, with seven games remaining in the regular season, the Thunderbirds were close to making the playoffs when the American Hockey League (AHL) suspended play on March 12, then formally canceled the remainder of the season on May 11.

“I’ve been in the pro-sports world for more than 10 years, and none of us have ever seen anything like this,” he told BusinessWest, using that phrase to talk about everything from the sudden end to the 2019-20 season to the prospects for the season tentatively scheduled to start in just four short months.

And those sentiments were echoed by executives with teams in another sport — baseball.

Indeed, in Holyoke, the Valley Blue Sox will not be playing in 2020 as its league, the New England Collegiate Baseball League (NECBL), announced on May 1 it would cancel the entire season.

Chris Thompson

Chris Thompson hopes the Starfires are able to take the field at all this summer.

Meanwhile, the Futures Collegiate Baseball League (FCBL) has not yet canceled its season, but it has pushed back opening day from May 27 to an as-yet-undetermined date, which affects the Westfield Starfires, a team in only its second year of existence.

Chris Thompson, owner of the Starfires, said the student athletes on his roster have already missed the spring college season because the NCAA canceled it due to the coronavirus. He remains hopeful there will be some opportunity for his team to play ball this summer, adding that this will happen only if the health and safety of the players, fans, and staff at the ballpark can be assured.

“From our perspective, we won’t play until it’s safe to do so, but we won’t cancel until we’re told we have to,” Thompson said. “There’s no blueprint for this.”

Taking a Timeout

With that last statement, Thompson, who once worked as an executive with the Thunderbirds, spoke for everyone involved in professional sports. There is no blueprint for how to proceed, but teams can try to plan for the short and long term and adjust for what will certainly be a new normal.

Costa said his team and the AHL are having discussions about what the experience will look like for fans at the MassMutual Center, and other buildings in the league, if and when play returns.

He pointed out that the NHL and the NBA may be able to play in empty arenas because of lucrative TV contracts that provide a great deal of income to the teams, but playing with no fans is just not just not feasible for the AHL because so much of its revenue is from ticket sales, concessions, and other in-arena activity.

“As a league, we cannot play without people in the stands,” said Costa. “It’s pretty much impossible to generate any type of revenue, yet we would have the same amount of expense.”

“As a league, we cannot play without people in the stands. It’s pretty much impossible to generate any type of revenue, yet we would have the same amount of expense.”

Before the season was cancelled, Costa was pleased with the momentum the Thunderbirds had been building in their four years as a franchise. Through 31 home games this season, the team had nine sellouts and anticipated at least three more for their remaining games. By contrast, last year they had nine sellouts in their entire 38-game home schedule. He also cited a promotion that received national attention when the team rebranded for one game as the Springfield Ice-o-topes, in a nod to The Simpsons.

With the beginning of a new hockey season four months away, Costa said the AHL has an opportunity to see how other professional leagues handle reopening for games and get a feel for what might work, or not work, as the case may be.

“The NFL will start its season before us,” he noted, “and that will be a real barometer in terms of social distancing at stadiums and what the experience might look like for people going to games.”

He added that state officials and MassMutual Center staff continue to look at ways to make the environment safe for everyone who enters the building. The AHL is also looking at contingencies such as delaying the start of the season to December or January.

“There’s nothing stopping us from pushing back the start and then playing a little longer next year,” Costa said, “especially if it gives us a chance to get a full season in.”

Costa has good reason to be optimistic for a full season next year as it marks the fifth anniversary of the Thunderbirds and begins a new affiliation with the Stanley Cup champion St. Louis Blues. “We’re already deep into planning what the fifth anniversary season is going to look like, and we’re excited about what the future will bring.”

Thompson had similar thoughts on the Starfires and what lies ahead for that team.

While the FCBL has been working on a plan for social distancing at the ballpark — in this case Bullens Field in Westfield — Thompson said working through an unprecedented challenge like this generates more questions than answers. How teams manage ballpark seating and concession operations are just two of the areas where he has concerns. It even affects travel, as the teams play games in three New England states.

“We usually travel on one coach bus,” he explained. “We can’t afford to have fewer people on two buses; it would double our transportation expense.”

Even if summer baseball happens this year, Thompson said coronavirus has already wrecked a special dynamic in the league. Starfire players often come to Westfield from different parts of the country and stay with local host families for the summer.

“Sometimes a family has an 8-year old Little Leaguer in the house who then has a college roommate for the summer, or we have empty nesters who are looking to host a player or two,” Thompson said. “Host families are one of the great things about summer baseball.”

Now, of course, the model of families hosting players is on hold until next year at the earliest.

Rather, Thompson is now looking to have more players from the eastern part of Massachusetts and the Hartford area of Connecticut so they could commute to games in Westfield.

With the Starfires in a holding pattern, it’s doubtful they will get to play their full 56-game schedule. During this time, Thompson has been reaching out to his corporate sponsors to keep them engaged.

“We’re looking at different ways to use our social-media platforms to get our fans involved and to give our corporate sponsors exposure,” he said.

Finding a Winning Formula

The Thunderbirds are also using social media to extend the reach of their sponsors. Costa said one effective technique has been running ‘rewinds’ of notable games from this season on Facebook. In some cases, the potential audience for sponsors can be larger than in-arena exposure.

“Our Facebook presence has grown to more than 22,000 followers, and on Instagram we have 15,000 followers, giving us a core audience of nearly 40,000 eyeballs,” Costa said, adding that many sponsors have already assured him they will be back next year.

When play was suspended, he placed a high priority on reaching out to season-ticket holders about the seven games they would be missing this year. The team provided options such as a refund for the remaining games, or a credit that would apply to tickets for next season. Costa and his staff also offered a third option.

“We’re setting aside some funds to provide tickets to frontline workers next season at no charge and to recognize all their efforts,” Costa said noting that nearly 25% of the season-ticket holders chose that option.

In a similar move, Valley Blue Sox General Manager Kate Avard said the team had planned to dedicate its opening day in 2021 to “honor and support community organizations and first responders who are currently on the front lines of combating COVID-19.”

As the area’s pro sports teams search for some answers concerning the future, they acknowledge they are hard to come by, noting that perhaps the only certainty is no shortage of uncertainty.

But guarded optimism still prevails.

“We have great community partners who want us to succeed for a long time,” said Thompson, speaking, again, for all those in his profession. “Setbacks like this make us more resilient.”

Coronavirus

BOSTON — Today, the Baker-Polito administration released “Reopening Massachusetts,” the Reopening Advisory Board’s report, which details a four-phased strategy to responsibly reopen businesses and activities while continuing to fight COVID-19.

The Administration also released a new “Safer at Home” advisory, which instructs residents to stay at home unless engaging with newly opened activities, as a way to continue limiting the spread of COVID-19.

Who Can Open Now

Starting today, based on current public health data and trends, Massachusetts will begin Phase 1 of a cautious reopening, and workplaces that are permitted to open are required to follow new safety protocols and guidance.

Each phase of the reopening will be guided by public-health data and key indicators that will be continually monitored for progress and used to determine advancement to future phases. Industries, sectors, and activities that present less risk will open in earlier phases. Those that present more risk will open in later phases.

Based on the public health metrics, manufacturing facilities and construction sites may open effective today with applicable guidelines (more on those later). Places of worship will be able to open with guidelines that require social distancing, and they are encouraged to hold services outdoors.

Hospitals and community health centers that attest to specific public-health and safety standards can begin to provide high-priority preventive care, pediatric care, and treatment for high risk patients.

Who Can Open on May 25

Starting Monday, May 25, other businesses may reopen, including lab space; office space; limited personal services, including hair salons, pet grooming, and car washes; retail, with remote fulfillment and curbside pickup only; beaches and parks; drive-in movie theaters; select athletic fields and courts; many outdoor adventure activities; most fishing, hunting, and boating; and outdoor gardens, zoos, reserves, and public installations.

Additional sectors expected to open on June 1 as part of Phase 1 include office spaces in the city of Boston with applicable guidelines.

The goal of this phased reopening plan is to methodically allow businesses, services, and activities to resume, while avoiding a resurgence of COVID-19 that could overwhelm the state’s healthcare system and erase the progress made so far.

Each phase will last a minimum of three weeks and could last longer before moving to the next phase. If public-health data trends are negative, specific industries, regions, and/or the entire Commonwealth may need to return to an earlier phase.

The Commonwealth will partner with industries to draft sector-specific protocols in advance of future phases (for example, restaurant-specific protocols will be drafted in advance of Phase 2).

Success in earlier phases will refine criteria for future phases, including travel, sizes of gatherings, as well as additional retail openings, lodging and accommodations, arts, entertainment, fitness centers, museums, restaurants, youth sports, and other activities.

‘Safer at Home’

Effective today, the Department of Public Health also updated its stay-at-home advisory, replacing it with a new “Safer at Home” advisory, which instructs everyone to stay home unless they are headed to a newly opened facility or activity. It also advises those over age 65 and those with underlying health conditions to stay home with the exception of trips required for healthcare, groceries, or that are otherwise absolutely necessary. All residents must continue to wear a face covering in public when social distancing is not possible, and individuals are advised to wash their hands frequently and be vigilant in monitoring for symptoms. Restrictions on gatherings of more than 10 people remain in effect.

Protocols for Reopening

Businesses are not required to reopen, and may not do so if they are unable to follow safety protocols. Materials for the sectors eligible to open in the first phase of reopening are included on the mass.gov/reopening website. Guidance for sectors opening in later phases will be posted online in advance of those phases.

 In order to reopen, businesses must develop a written COVID-19 control plan outlining how its workplace will prevent the spread of COVID-19. Required materials are located on mass.gov/reopening, and include detailed sector-specific circulars and checklists to facilitate compliance.

Required materials for businesses to self-certify are located on mass.gov/reopening, and include a COVID-19 control-plan template, which must be retained on premises and provided in the event of an inspection; a compliance-attestation poster to be posted in a location visible to employees and visitors, indicating a completed COVID-19 control plan; and other posters and signs describing rules for maintaining social distancing, hygiene protocols, as well as cleaning and disinfecting.

Businesses providing essential services, as defined in the governor’s March 23 executive order and updated on March 31, April 28, and May 15, may remain open and have until May 25 to comply with the general workplace-safety standards, as well as their industry’s sector-specific protocols.

Healthcare

Effective today, hospitals and community health centers that attest to meeting specific capacity criteria and public health and safety standards will be allowed to resume a limited set of in-person preventative, diagnostic, and treatment services.

Effective May 25, other healthcare providers who attest to meeting these standards may resume limited in-person services.

Services that may be performed are limited, based on the provider’s clinical judgment to high-priority preventive services, including pediatric care, immunizations, and chronic disease care for high-risk patients, and urgent procedures that cannot be delivered remotely and would lead to high risk or significant worsening of the patient’s condition if deferred.

Before the phased in-hospital expansion and non-hospital reopening, the following statewide metrics must be met: 30% of hospital ICU beds (including staffed surge capacity) must be available; and 30% of total hospital beds (including staffed surge capacity) must be available.

In order to reopen or expand services, healthcare providers must attest to public-health standards and specific guidelines; ensure adequate personal protective equipment is on hand and a reliable supply chain and other supplies and policies are in place; maintain infection-control readiness (workflow, cleaning, social distancing, etc.); and institute workforce and patient screening and testing protocols. Also, hospitals must have at least 25% ICU and total bed capacity and must reopen pediatric ICU and psychiatric beds if they had been repurposed for surge capacity.

Childcare

Childcare and summer recreation camps will reopen in a phased approach. The state departments of Early Education and Care (EEC) and Public Health are developing guidelines that balance families’ need for childcare with health and safety. The initial reopening plan will focus on families who have no safe alternative to group care by increasing emergency childcare capacity. EEC will also partner with industries returning to work to develop options specific to their workplaces.

In March, the Baker-Polito administration stood up an emergency childcare system to support children of essential workers and vulnerable families with extra virus-mitigation protocols. During Phase 1, the emergency childcare system already in place will be utilized to meet the needs of people with no alternatives for care. Currently, only 35% of the 10,000-child emergency childcare capacity is occupied, and the system has the ability to serve more families to provide care options as more sectors come back online.

Transit

The MBTA has been and will continue to implement measures to slow the spread of COVID-19 across the system to keep employees and riders safer.

​Riders are required to wear face coverings and must make efforts to distance. Riders are asked to avoid riding transit if they are exhibiting symptoms of COVID-19. Employers are encouraged to stagger schedules and implement work-from-home policies to reduce demand, especially during rush hours.

The MBTA will continue to take protective and preventative measures such as frequently disinfecting and cleaning vehicles and stations and providing protective supplies to workers.

To mitigate risk while providing appropriate levels of service, the MBTA will support the transit needs of essential workers and those returning to the workplace in Phase 1 while continuing with limited service to maximize employee and rider safety. It will ramp up to a modified version of full service by Phase 3, although social-distancing efforts will limit effective capacity on vehicles even after full-service schedules are restored.

The MBTA will also actively communicate public-health guidance and schedule adjustments in-station, online, and over social media.

Supplies

In order to operate, all Massachusetts businesses will need to meet the mandatory workplace-safety standards and relevant sector-specific protocols published by the state. To support businesses, the state has developed a guide to educate business owners on what supplies are needed to return to workplaces, and a portal to connect businesses with manufacturers and distributors. These are now available to business owners at mass.gov/reopening.

Educational materials will be provided to define how an employer should prepare their workspaces to reopen and what products are appropriate for employees to protect themselves at work. While face coverings are critical, medical-grade face coverings are not necessary for non-healthcare workers.

Schools and Higher Education

As previously announced, Massachusetts’ K-12 school buildings will remain closed through the end of the 2019-20 school year, with remote teaching and learning in place. Schools will continue offering essential non-educational services to their communities. Plans are being made for summer learning programs and 2020-21 school year, and will be shared with the public in the weeks to come.

Massachusetts’ diverse higher-education institutions continue to foster teaching, learning, student support, and essential research remotely throughout this time. They are working together and in partnership with the state to ensure a safe and gradual return to campus life. In the upcoming weeks, institutions will develop customized reopening plans with safety of their communities in mind.

About the Reopening Advisory Board

The 17-member Reopening Advisory Board, co-chaired by Lt. Gov. Karyn Polito and Housing and Economic Development Secretary Mike Kennealy, consists of public-health experts, municipal leaders, and members of the business community representing many facets of the Massachusetts economy. Since its formation on April 28, the board met with a total of 75 stakeholder groups including industry associations, regional chambers of commerce, community coalitions, and labor organizations, representing over 112,000 different businesses and more than 2 million workers across the Commonwealth. The Reopening Advisory Board also considered written comments from more than 4,500 employers, organizations, and individuals in the development of its plan.

Coronavirus

Opinion

By Thea M. Lee

This week, Democrats in the U.S. House of Representatives released the Heroes Act, which would provide critical relief and recovery measures to the U.S. economy and the people and businesses in it.

One of the most important features of the bill is that it would provide $875 billion in direct state and local aid, as well as targeted fiscal help for education and Medicaid spending for state governments. This is an essential step forward, given that state and local governments will need up to $1 trillion by the end of 2021.

The bill would also provide an extension of the unemployment insurance (UI) provisions in prior relief and recovery packages. This is excellent news from both a humanitarian and economics perspective — particularly the extension of the increased UI benefits of $600 a week, which was one of the most effective parts of the earlier packages. The bill includes many other key provisions, including investments in coronavirus treatment, testing, and contact tracing, which are necessary to reopen our economy.

Inevitably, some policymakers will express concerns over the price tag, which is estimated to be on the order of $3 trillion. This concern is utterly misplaced in this crucial moment. What are scarce in the economy right now are opportunities for workers to earn wages and demand for firms’ output.

Fiscal resources are not scarce — interest rates (our best real-time signal of scarcity of the federal government’s capacity to take on debt) remain historically low. We need to use what we have in abundance — fiscal resources — to relieve the crushing constraints imposed on families by the scarce opportunities to work and earn income. Investments financed by greater public debt will reduce the severity of the economic crisis and will help avoid a prolonged period of high unemployment that would do far more serious and persistent damage to the economy. In short, these investments will have a very high rate of return.

Further, the investments this bill calls for are the absolute minimum required to address the magnitude of the crisis we are facing. The Congressional Budget Office projects that, without additional relief, the unemployment rate will average 16% in the third quarter of this year and 10.1% for the entire calendar year of 2021. Those numbers, which were released two and a half weeks ago, are now looking overly optimistic, given that more than 30 million workers have already filed for unemployment insurance and millions more continue to pour in.

A deep concern in today’s legislation is the lack of ‘automatic’ triggers for the expiration of the bill’s provisions. There is an enormous amount of uncertainty around how the economic impact of the coronavirus will unfold. Assigning arbitrary end dates to provisions to sustain the economy, as the bill does, makes little sense when the process could be handled automatically, by having provisions phase out as the unemployment rate or the employment-to-population ratio are restored to near-pre-virus levels. Using automatic stabilizers would not be any more expensive than the cumulative cost of multiple extensions of the programs in the bill — but it would prevent destructive lapses in critical programs while Congress negotiates extensions, and it would alleviate corrosive uncertainty by giving businesses, states, and households crucial confidence around budgeting and planning.

Thea Lee is the president of the Economic Policy Institute.

Coronavirus Special Coverage

Climbing Out

It’s not easy for a business to be shut down — seriously curtailing or even eliminating all revenue — for any period of time. But it’s much more frustrating not to know how long that period of time will actually be. That’s where Massachusetts businesses deemed non-essential during the COVID-19 pandemic stand right now — in a limbo of treading water and being as flexible, creative, and patient as they can while they await word on when the state will reopen its economy, and what form that re-emergence will take.

At some point in early March, Ashley Batlle knew what was coming. And she knew what it meant for her health and wellness spa, Beauty Batlles Lounge, that she opened in Chicopee about a year ago.

“This is a personal, physical-contact business. You’re definitely in close proximity with the client, giving them a service that everyone looks forward to — something they’re accustomed to making part of their schedule,” Batlle said. Yet, the rumblings were that, at some point, the rising threat of COVID-19 was going to force businesses to shut their doors. “So we tried to get as many clients in as we could.”

And then, suddenly, those appointments that clients look forward to were cancelled, postponed until — well, nobody knows yet. And that’s the problem for businesses the state deemed non-essential: the unknown.

Toward the end of April, the Baker-Polito administration extended the statewide essential-services emergency order by two weeks, from May 4 to May 18. Businesses and organizations not on the list of essential services can only continue operations through remote means — if at all possible.

For Batlle, well … she can’t offer facials, waxing, microblading, and other treatments remotely. And she was unable to access benefits through the CARES Act and other government relief measures.

“My anxiety level has been very, very high. It hasn’t been fun, not knowing when we’ll begin to open and what kind of measures will be asked of us by the state and city to be able to reopen,” she said, noting that, as a one-woman operation, it will be easy to comply with social-distancing regulations sure to accompany any sort of reopening.

What’s less certain is how customers will respond — to all types of interactions, not just her services.

“I’m going to be able to open up my doors and get everyone in as quick as possible — that’s what I would love to do, but I think it’s going to be a soft situation, where, little by little, we’re getting back to business,” she explained, noting that some people will be leery of close contact at first, especially since the virus doesn’t tend to show symptoms for a while.

Still, most business owners shuttered by the pandemic would love an opportunity to at least try to get back to normal, even if they understand why the governor put the stay-at-home mandate in place.

Rick Sullivan

Rick Sullivan

“We may be seeing the number of cases plateauing, but [development of] a vaccine, or treatment medication, is still in its infancy, so the data still says go slow. I do think some businesses previously deemed non-essential could have protocols put in place to allow partial reopening. However, nobody wants to reopen prematurely and see worse spikes later in the year.”

“While we expected and understand Governor Baker’s decision to extend the stay-at-home advisory, that tough decision underscores the challenging circumstances we find ourselves in as a business community,” said Nancy Creed, president of the Springfield Regional Chamber. “We’re doing a balancing act between wanting to get back to work and getting back to work in a safe manner.”

Many of her members supported the two-week extension; a late-April chamber poll, right before the non-essential closures were extended by two weeks, asked what worried them more: the spread of the virus if restrictions were loosened too soon, or the negative economic impact of not reopening quickly enough. It also asked if Massachusetts was ready for a May 4 reopening.

“Seventy-seven percent responded that the spread of the virus was more worrisome, and an overwhelming number — 91% — responded that Massachusetts was not ready for a May 4 reopening,” Creed said, “clearly revealing that much of the business community is concerned about protecting those most vulnerable and stopping the spread of the disease, and demonstrating the commitment our business community has to the community as a whole.”

Rick Sullivan, president of the Economic Development Council of Western Massachusetts, took a similar outlook.

“I do not think that anyone is surprised that the shutdown has been extended, as the governor has been clear he will follow the data as to when to begin reopening the economy,” Sullivan said. “We may be seeing the number of cases plateauing, but [development of] a vaccine, or treatment medication, is still in its infancy, so the data still says go slow. I do think some businesses previously deemed non-essential could have protocols put in place to allow partial reopening. However, nobody wants to reopen prematurely and see worse spikes later in the year.”

All that may be true, but it’s still difficult — and, for many businesses, exceptionally concerning — to stay closed this long, and possibly longer. Businesses are doing what they can to be creative, in many cases opening doors of commerce they will continue to pursue after the COVID-19 threat passes, or even using the time to support other community members in need (more on that later).

But no one likes the uncertainty of not knowing whether May 18 is the real target for reopening, or just another can to be kicked down the road.

Waiting Game

Paul DiGrigoli would like to reopen, too.

“This has impacted us tremendously,” said the owner of DiGrigoli Salon and DiGrigoli School of Cosmetology in West Springfield. “We haven’t had a chance to reach out to all our clients; some we have. But we just have to wait until Charlie Baker gives us the green light, which hopefully will be May 18.”

He was able to secure a Paycheck Protection Program (PPP) loan, succeeding in the second round of that program’s disbursements after missing on the first round. That will help cover costs like utilities and mortgage interest while keeping his employees paid for eight weeks as well. “We went through Community Bank, and they were phenomenal,” he said.

And he’s getting ready for some anticipated changes when the salon does reopen.

“We bought a lot of hand sanitizer to put at the front desk in the school and the salon, we’ve gotten gloves and masks, and what we’re going to do initially is get the clients’ cell phone numbers and call them from the reception desk to let them know when their appointment is available. And we’ll stick with staying six feet apart, spreading out the stations. Both the stylist and the client will have to wear a mask until further notice. It’s going to be uncomfortable at first.”

As for the school, online training has been effective for theory, but students haven’t been able to practice what they learn.

In general, he told BusinessWest, “we’re really trying our hardest to get back to normal, but we’ve really been handcuffed. There has been frustration and anxiety because we don’t know what to expect.”

Or when to expect it, he added. “We don’t know when it will happen. They’re saying May 18, but who the heck knows? We’re hoping it doesn’t go beyond that, but thank God for the relief funds — that really saved us.”

Claudia Pazmany, executive director of the Amherst Area Chamber of Commerce, polled her members at the end of April and put some of that anxiety into raw numbers. For example, responding businesses are losing an average of $55,837 per month in revenue during the shutdown, and 61% have had to lay off or furlough employees. More than 20% have serious concerns about being able to reopen if the state of emergency extends beyond June 1.

“They’re worried,” she said. “Rent, utilities, and payroll are three areas that continue to be a struggle.”

Amherst is also in an unusual situation, as it’s a small town that loses more than half its population when UMass Amherst and Amherst College aren’t in session. The downtown businesses in particular rely heavily on students — and now there’s talk across the region that colleges might start the fall with distance learning only.

Claudia Pazmany

Claudia Pazmany

“On the flip side, this has stirred a lot of innovation from businesses who have been deemed non-essential or limited; they’ve pivoted or gone online. The creativity and innovation we’ve seen have been really exciting.”

“Initially, there hasn’t been a lot of grumbling, but they’re generally frustrated and just sad. Everything is unknown,” Pazmany told BusinessWest. “They’re fearful — so much is unknown, and delays keep coming. We don’t have a deadline or guidelines; they just keep pushing back the date, and that causes more fear and anxiety.”

Driving Innovation

And also a good deal of invention, driven by necessity.

“On the flip side, this has stirred a lot of innovation from businesses who have been deemed non-essential or limited; they’ve pivoted or gone online,” Pazmany said. “The creativity and innovation we’ve seen have been really exciting.”

Take Zanna, a clothing shop that has been a staple of Amherst’s downtown for decades, but has never had an online store. Until now.

“You have to look at the good in this crisis,” owner Amy Benson said. “In my case, it moved me — encouraged me — to get an online store open. I’ve only owned the store a year, so I didn’t have time to even think about an online store before. Now I did, so I took the time to get it up and going.

“Do I think it’s the wave of Zanna’s future? No, but I think it’s an extension. We’ll probably keep it going once we’re open,” she added, noting that it opens more opportunities. “We’re in a transient community. We see people from all over the country, between the university and Amherst College. We all want things to be the way they were, but we know we’ll have to adapt. Some of these new trends, like my online store, I’m not going to shut that off.”

Benson has been creative in other ways as well, from curbside pickup — with everyone wearing masks — to ‘virtual shopping,’ where she walks a customer around the store using an iPad and FaceTime, showing them tops and bottoms and coordinating outfits.

“We want customers to be engaged, and they want to hear from us because we form those kinds of relationships,” she said. “When we’re FaceTiming, we’re FaceTiming with a friend and shopping with a friend. It’s a really important way to stay connected.

“You have to do something,” she went on. “You can’t just close your doors and do nothing. Our customers are women who have supported us for over 40 years; we’re not going to just shut our doors and not communicate. I do whatever I can to stay engaged with our customers, they’re the lifeline of our business.”

In other words, Zanna has come a long way since last month, when Benson was in “full panic mode” and offering nothing but a gift-certificate promotion. “We’re not bringing in nearly the revenue we would normally, but we’re supporting what we’re able to do right now.”

She’s not alone, Pazmany noted, citing examples like restaurants revamping their online presence with expanded takeout menus to Amherst Books shipping and delivering items to customers, to the Amherst Area Chamber itself, which has been connecting with the business community through marketing seminars.

Doing Some Good

Or taking advantage of an unusual time to do some good in the community.

Dean’s Beans, based in Orange, has seen a surge in web sales as coffee drinkers are brewing more at home due to social distancing and telecommuting. With COVID-19 causing great economic hardship, the company has chosen to share the money from these web sales with the community by helping to fund school food programs — a total of $26,000, in fact, divided among seven Western Mass. school districts.

“Making sure children have access to food throughout this pandemic is crucial, and we are proud to support these essential programs in Springfield, Amherst, and Orange,” said Dean Cycon, founder and CEO of Dean’s Beans. “Part of a company’s profitability is the positivity it generates for others, and we are committed to helping our communities ease the pain of this crisis.”

Amy Benson

Amy Benson

“You have to look at the good in this crisis. In my case, it moved me — encouraged me — to get an online store open. I’ve only owned the store a year, so I didn’t have time to even think about an online store before. Now I did, so I took the time to get it up and going.”

Meanwhile, Batlle has launched the Hero Project, a virtual fundraiser designed to give back to those on the front lines fighting the pandemic. Funds raised will be set aside to provide complimentary self-care services at Beauty Batlles Lounge for healthcare professionals, police officers, firefighters, EMTs, and employees of sheriffs’ departments, once she can open her doors again. Visit beautybatlles.com to donate.

Considering the masks they’re wearing all day long, “they’re going to need facials when this is done,” Batlle joked, before getting serious.

“I reached out to my nurse friends and heard their stories, about the trauma they’re going through. One friend works in the ICU at a COVID unit — she goes into work one day and has four patients, and when it’s time to leave, she only has one. That has to do something to you. How can I give back to them? That’s where the idea for the Hero Project came in.”

It’s a way to pay it forward while anticipating the light at the end of the tunnel, she told BusinessWest. “This isn’t easy on anybody.”

It would be easier with some clarity from Beacon Hill, but that’s not coming right now. Instead, Baker convened a Reopening Advisory Board of public-health officials, representatives from the business community, and municipal leaders from across the Commonwealth. They are charged with advising the administration on strategies to reopen the economy in phases based on health and safety metrics, and are expected to develop a report by May 18.

That’s just the report date. So it’s easy to see why businesses might not suddenly be reopening on that date.

“Personally, every time Governor Baker gives us a date when we’re going to open, I think, ‘hmm, I don’t know if that’s going to happen,’” Benson said. “I’m always thinking, ‘what’s the worst-case scenario? June 1? They keep pushing it back.”

That’s why it bothers Batlle that some proprietors of businesses like hers continue to offer services from their home.

“We should all just be staying stationary; we’re all in the same boat,” she said. “That just puts more stress on business owners who are actually following the rules, and it’s could extend the time we’re going to be out of work.”

Which, for too many business owners and employees across Western Mass., already feels like too long.

Joseph Bednar can be reached at [email protected]

Coronavirus Special Coverage

Proceeding as Planned

Gene Cassidy

Even if the fair goes on as scheduled, Gene Cassidy says, crowd counts could be way down.

Gene Cassidy likes to say those at the Big E ‘manufacture’ the 17-day annual fair that is by far the biggest single event on the region’s calendar.

“It’s like putting an automobile together,” he told BusinessWest. “You really can’t cut components out and expect the vehicle to run; it costs ‘X’ number of dollars to produce the fair, and we’re still going to spend that — we have to produce a fair that people are going to want to come to.”

And so, those planning the 2020 edition of the Big E are proceeding with the mindset of including all the parts that typically go into the Big E, despite the COVID-19 pandemic that is currently decimating the local economy and wiping events off the calendar in wholesale fashion.

But while Cassidy is currently certain there will be a Big E — that’s currently — he’s less certain about a great many other things. Perhaps most importantly, he doesn’t know how many people will come to the fairgrounds this September. He quoted at least one poll showing that 50% of respondents said they would not let the pandemic impact their decision to attend an event like the Big E, but another 40% said they wouldn’t attend such an event unless there was a vaccine for the virus.

And if attendance is down 20%, 30%, or even 40%? “It’s going to be a heavy lift to overcome that, but we can’t afford not to go forward.”

And if the fair should have to be canceled? That has happened a few times during the history of the fair — during World Wars I and II, to be specific — but Cassidy isn’t thinking in those terms, because the economic hit would be extremely difficult to absorb.

“I don’t want to say we’d close, but it would be a difficult, heavy lift to figure out how we would sustain ourselves so we could reopen in the future,” he told BusinessWest, adding that such a decision won’t have to be made for some time, and he is obviously hoping, and projecting, that enough progress can be made that he won’t have to take that course.

“I have confidence that we’re going to learn from this bug faster than we’ve learned from anything in the past,” he said. “And I have confidence that, by the time we get to the summer, things are going to start to loosen up; we’ve learned a lot, and we’re going to learn a great deal more — and we will open.”

As he talked about this fall’s Big E and the prospects for it, Cassidy joked that, for a change, the ongoing reconstruction of the Morgan-Sullivan Bridge, which links West and Agawam and abuts the Big E property, will not be the main topic of conversation this summer and fall.

It will still be a topic — two lanes will be closed until late summer 2021, according to the current schedule — but certainly not the topic.

“I don’t want to say we’d close, but it would be a difficult, heavy lift to figure out how we would sustain ourselves so we could reopen in the future.”

Indeed, the bridge is now largely an afterthought as the Big E and the region cope with the global pandemic and questions about both the short term and the long term that simply cannot be answered.

Already, the virus has had a huge impact on the Big E, as it has on any venue that hosts large gatherings. Searching his memory banks — and it was hard to remember back that far because so much has happened, or not happened, as the case may be — Cassidy said the last event event staged at the Big E was an antique and crafts show on March 7 and 8.

Everything since has been wiped off the calendar, including the huge home show scheduled for late in March and the planned Hooplandia, a 3-on-3 basketball festival slated to make its much-awaited debut in June.

Everything is cancelled or postponed through June, he went on, adding that he was not aware of any cancellations for July at this time. Aside from the basketball tournament, this summer was to be dominated by a number of horse shows and a few other gatherings.

But most of the attention has now shifted to the fair, which annually attracts more than 1 million people to the region and contributes more than a quarter-billion dollars to the local economy. At this point in time, the expectation is that the show will go on, said Cassidy, adding that adjustments can and will be made to help maintain the safety of visitors and employees alike.

These will come in such realms as ticketing and accessing the property, he said, adding quickly that, given the nature of fairs — putting a lot of people in very close proximity to one another as they do everything from ride on rides to eat fried dough to watch concerts — there isn’t much more that can be done to facilitate social distancing.

“The fact is … a fair is not the place where you can enforce social distancing,” he said. “We can be suggestive, but that’s not what a fair is. It’s uniquely the American way of life, and it just doesn’t lend itself to social distancing.”

These sentiments explain why there are questions — and concerns — about just how many people will make that pilgrimage to West Springfield this fall, and how many times they’ll make it.

“Citizens are going to decide how close they want to be to other people,” said Cassidy. “And I suspect that there’s a segment of society that may never return to a fair again.”

For now, those planning the fair are proceeding to ‘manufacture’ a fair like those that have come before it — but with some adjustments for the pandemic, obviously.

“We’re building a comprehensive plan for cleaning and disinfecting,” he told BusinessWest, adding that, given the fact that the Big E is an agricultural fair, it has rigorous policies in place for disinfecting the various facilities on the grounds.

Other changes will come with ticketing — there will be print-at-home ticketing, for example — as well as with access to the grounds in an effort to create some distance between people. Employees will wear masks and gloves, and visitors will be wearing masks as well, he said.

As for planning for the fair, it is, in most all respects, right on schedule.

“We’re going at the same speed as we always do,” Cassidy noted. “All the entertainment is booked; the concessionaires are lined up, although many of them are not working currently, and and I hope they can make to September. We’re going full-speed ahead — at this point, the fair is more than 90% ready to go.”

And, as noted earlier, it has all the components that the fairs have had in recent years.

“It costs us about $20 million to run the fair, and we hope to gross about $23 million or $24 million from the fair’s operation,” Cassidy noted. “We can’t produce an event that’s compromised, because people won’t come back.”

That said, one of his biggest concerns moving forward is the massive workforce needed to put on the fair, and the generational nature of that workforce.

“We have grandparents, parents, and grandchildren, all of whom participate in the workforce,” he explained. “And we have hundreds of people who volunteer at the Eastern States, many of whom are over age 65. My job is to protect my 65-year-old as well as any patrons who are in that demographic. That’s what our plan is focused on — how do we protect people who are most vulnerable?”

—George O’Brien

Coronavirus Special Coverage

For Many Impacted by the Pandemic, It Might Be a Viable Option

By Michael B. Katz, Esq.

One thing I’ve learned in my 45 years practicing bankruptcy law is that most individuals who wind up taking this course of action are good people who have found themselves in bad and unexpected circumstances, most often caused by things that were beyond their control.

People get sick, get divorced, lose employment, and have accidents. Likewise, businesses can be adversely affected by events over which they have no meaningful control. Outbreaks of disease, oil shortages, breaks in the supply chain, changing technology, interruption of their workforce, and many other factors can all cause a business or individual to be unable to stay financially afloat.

Which brings us the COVID-19 pandemic. It represents the epitome of unexpected circumstances and matters beyond our control. Indeed, in an effort to slow the spread the spread of the virus, the state has shuttered all non-essential businesses, leading to unemployment levels not seen since the Great Depression.

In these precarious times, individuals and businesses are finding themselves in dire financial circumstances they could not have foreseen, nor done anything to prevent. Given their predicament, some might be looking at bankruptcy as a possible recourse.

In order to help honest but financially burdened individuals make a fresh financial start, Congress has passed a number of bankruptcy laws. Here are the key types:

 

Chapter 7

This is the type of bankruptcy proceeding that allows certain qualifying individuals to eliminate most of their unsecured debts (those without mortgages) and to make a fresh financial start.

In order to qualify for Chapter 7, a person cannot have filed Chapter 7 bankruptcy within the prior eight years. The person filing, known as a debtor, must also pass a test which limits how much earned income the debtor had earned in the prior year. This is called the means test, and it varies based on the state in which the debtor resides, the number of dependents in the family, and whether there is any earned income generated by the debtor’s spouse.

For example, for a Massachusetts resident, the limitation is $67,119 for a single person, $84,125 for a couple (combined gross income), and then increases in different amounts for additional dependents. These limitations became effective as of April 1, 2020 and are subject to periodic adjustment. Similarly, in Connecticut, the individual cutoff is $66,689, and $88,594 for a couple.

Michael B. Katz

Michael B. Katz

In these precarious times, individuals and businesses are finding themselves in dire financial circumstances they could not have foreseen, nor done anything to prevent. Given their predicament, some might be looking at bankruptcy as a possible recourse.

While most unsecured debts can be eliminated in Chapter 7, there are some types of debts that cannot, including income taxes owed from the past three years, alimony and child support, student loans, and debts incurred due to an accident while driving under the influence. 

One of the major benefits of Chapter 7 for an individual obtaining a discharge is that not only are the debts — such as most credit cards, personal loans, foreclosure and repossession deficiency balances, and medical bills — totally wiped out, they are eliminated without incurring any phantom income, on which both federal and state income taxes would be owed.

Compare this to either making a direct settlement with a lender or credit-card company, or going through a non-judicial, multi-year debt-settlement plan, where anything that is settled with the creditors results in the person receiving a 1099 from the creditor and having to pay taxes on the forgiven portion of the debts. In Chapter 7, Congress has decreed that all discharged debts are tax-free, and therefore no hidden taxes are incurred.

The key aspect of Chapter 7 is that the Bankruptcy Court is trying to help an honest debtor make a fresh financial start. In regard to secured debts — for example, those debts that are secured by a lien or mortgage, most often vehicle loans or a home mortgage — in Chapter 7, the debtor gets to select whether they wish to keep the item and continue making the payments, or to surrender the item and wipe out any shortfall amount that might exist after the secured party sells the item after repossession or foreclosure sale.

While a corporate entity can also elect to file Chapter 7 and have the Bankruptcy Court liquidate its assets and distribute the proceeds to its creditors, it does not get to carry on its business affairs after filing. Only an individual qualifies for a discharge, so a corporate entity must cease all business after it files Chapter 7.

 

Chapter 13

In this type of proceeding, an individual is given an option to repay all or a portion of the debt, if approved by the Bankruptcy Court and Chapter 13 trustee, through a plan of reorganization that generally lasts for a period of three to no more than five years. There is no need to pass the means test to qualify for Chapter 13, and, unlike the restrictions in Chapter 7 that allow it to include only unsecured debts, Chapter 13 can also affect secured debts.

The most common application in Chapter 13 is to use it to stop a foreclosure sale of a debtor’s home or automobile, and it allows the debtor to pay the outstanding past-due amounts over the life of the plan, in addition to requiring the debtor to make the full current payment each month. 

For example, if a lender is owed $60,000 in back mortgage payments, requiring the borrower to pay it in full in order to prevent a foreclosure sale, in a Chapter 13, the debtor could propose to pay $1,000 per month for the 60 months of its Chapter 13 plan, plus pay the current mortgage amount each month so that debtor does not fall further behind. 

These are simplified examples, and the details of a Chapter 13 plan are more complex and would require you to consult with a qualified attorney for more specific advice.

 

Chapter 11

A Chapter 11 reorganization can be filed by an individual who owns a business and operates as a ‘DBA,’ but due to its complexity and expense, it is most often filed by a corporate entity.

The idea of a Chapter 11 is to grant the business a ‘time out’ and give it some element of time to figure out a plan of reorganization to allow it to continue in business. Under 11 USC 362(d), all lawsuits and claims against the debtor’s business are enjoined from proceeding, and the debtor gets time to meet with its creditors and to seek to formulate a formal plan of reorganization.

That plan may propose to pay unsecured creditors a percentage on the dollar, which must be found to be a greater percentage than the creditors would receive in an immediate liquidation of the business and its assets. In some cases, mortgage debts can be reduced to the actual value of the assets that secure the mortgage, so that if the debtor owes a lender $750,000 on a building that can be proven to be worth only $500,000, the debtor can seek to ‘cram down’ the mortgage to a reduced amount of $500,000, and the additional $250,000 gets treated as an unsecured debt, and paid at the same percentage on the dollar as the other unsecured debts.

This is a very simplified version of a Chapter 11, as there are many other requirements that must be fulfilled by a Chapter 11 debtor, and the cases are necessarily complex and sometimes expensive. However, the overall savings to the debtor can be substantial, and they are often the key to a business’ survival.

The court in a Chapter 11 is seeking to be fair to both the debtor and its creditors, as well as preserving the jobs of the employees of a business.

 

Non-bankruptcy Alternatives

There are sometimes options for a business to consider without the need to file a formal insolvency proceeding. They require a skilled and knowledgeable attorney to know how to handle these matters, and they include utilization under Massachusetts state law of an assignment for the benefit of creditors, trust mortgage, or sometimes just using a skilled negotiator to try to convince creditors to accept an informal settlement of their debt, rather than forcing the debtor to use funds to pay for a formal bankruptcy proceeding, when those same funds could be paid toward a voluntary settlement with the creditors. 

In reality, these voluntary settlements are often difficult to finalize because you need to negotiate with multiple parties, who sometimes will not agree to the same terms. In a Chapter 11, the creditors are legally required to accept whatever settlement is approved by the bankruptcy judge, after a plan is voted on and approved by the Bankruptcy Court.

It is important that you not let your pride prevent you from finding the best and most effective solution for your personal or business cash-flow problems. You cannot make an informed decision until you know and understand all of your options, as well as the positives and negatives of each option.

During this pandemic, many fraudulent parties are preying on people, so make sure to do your homework to get the name of a qualified person to advise you or your business. Contact the Hampden County Bar Assoc. Lawyer Referral Service, call your accountant, or do a Google search to find an experienced person to help you or your business. 

Working together, we can all find ways get through these uncharted waters.

 

Michael Katz is the chairperson of the Bankruptcy & Creditors Rights department of the law firm Bacon Wilson, P.C., with offices in Springfield, Northampton, Amherst, Hadley, and Westfield; (413) 781-0560.

Coronavirus

Analysis

By George O’Brien

As the Commonwealth begins the arduous task of turning its economy back on, the complicated situation conjures images from a scene in the movie Apollo 13.

That movie chronicled what became known as the ‘successful failure’ of that ill-fated flight to the moon almost exactly 50 years ago. Those familiar with the story know that, just over halfway to the moon, an explosion damaged the Odyssey spacecraft’s service module. Long story short, the crew had to abandon the Odyssey for the lunar landing vehicle Aquarius, and subsisted there while those at NASA figured out a way to get the crew home.

To get back to Earth safely, those at NASA had to eventually figure out a way to somehow start up the command module, which had been sitting idle for days, without power, in temperatures far below zero. If you’ve seen the movie, you remember a scene where one of the crew members, frustrated by the slow movement on a firm plan to restart the spacecraft, muttered ‘they don’t know how to do it’ to his colleagues.

At this precarious moment in history, many in the Commonwealth are tempted to say the same thing. Like the Odyssey, the state’s economy has been essentially frozen for several weeks now. Unthawing and restarting it will be a complicated process, and, just as with Apollo 13, there is no shortage of Ph.D.s working on the problem and trying to find a solution.

And, just as with that flight, there is obviously a lot at stake. With Apollo 13, it was three lives. With this pandemic … well, according to a report from the Massachusetts High Technology Council, the jobs of at least 40% of workers making less than $40,000 a year are at risk. Already, nearly 25% of the state’s workers have filed for unemployment benefits over the past six weeks. That’s right — close to one worker in four has sought relief. And the numbers could go higher still.

“It will be different, and it will be different for quite some time. Anyone who still believes a switch can be flipped and we can go back to where we were is sadly mistaken.”

Suffice it to say this will be an extremely complicated process, and those undertaking it have to get it right. If they go too fast or move improperly, a setback will likely prove even more devastating for the state’s economy — an economy that was, as we all know, humming right along.

Indeed, just a few short months ago, the Boston-area economy was absolutely bursting at the seams. Cranes were everywhere, major corporations were moving to the city, and people were looking to high-speed rail as a way to somehow possibly relieve the congestion, sky-high prices, and intolerable commutes that were defining life inside Route 128.

It seems like those public hearings in downtown Springfield on high-speed rail options were years ago, not several weeks ago.

And the same can be said of the employment picture across the state and even here in Western Mass. It was only a few months ago that we were all talking about the skills gap and how companies with vacancies couldn’t fill them. The word ‘ghosting’ became part of the vocabulary, a term used, in some instances, to describe someone who, between the time they were offered a job and was scheduled to start, found something better. Every employer had a ghosting story — or several of them.

Not to carry the Apollo 13 analogy too far (too late), but the state’s economy was absolutely soaring, a rocket ship bound for new heights. And then … the explosion.

Now, the task at hand is to restart the economy and get people back home, to where they were. But that’s where the analogy ends. Home is much different than it was when we left, and there’s no just going back to it.

The return to something approaching normal, or a new normal, will be slow, as in painfully slow, and gradual. It will be to workplaces where people wear masks, work at least six feet apart, and get tested for the virus regularly. It will be to a casino where the slot machines are spaced widely, one might use a long, plastic stick to press buttons on those slots, and where thermal cameras monitor the temperature of patrons. It might well be a phased-in return where those who are older and most vulnerable, as well as those most able to work remotely, return last. It will be to a business community where the vast majority of ventures are simply fighting for their lives.

It will be different, and it will be different for quite some time. Anyone who still believes a switch can be flipped and we can go back to where we were is sadly mistaken. This is made clear by the stubbornly high numbers concerning cases and deaths in Massachusetts, and the fact that, just a few days ago, the governor ordered people to wear masks in public.

The state has to find a way to reopen the economy — it can’t stay closed much longer — and also keep people safe, not overwhelm the healthcare system, and not present a scenario where we take one step forward and two or three back.

Apollo 13 had a happy ending — even if the crew didn’t get to moon. But this isn’t a movie, and we don’t know how it’s going to end.

George O’Brien is the editor of BusinessWest

Coronavirus

Opinion

To date, Gov. Charlie Baker has enjoyed strong amounts of support from the business community and state residents in general when it comes to his handling of the COVID-19 pandemic. Indeed, a recent Boston Globe/Suffolk University/WGBH News poll showed that 84% approve the governor’s handling of the crisis, and 85% back his decision to extend the stay-at-home advisory and closure of non-essential businesses.

But behind those numbers is growing restlessness and, in some cases, defiance. And it’s all justified. Thus far, the governor has erred on the side of caution — some have even taken to calling him ‘Cautious Charlie’ — but people are tiring of caution. They want action. They want a plan. They want the state open for business again.

They see it happening in other states — and soon, they’ll see it right next door in New Hampshire and Rhode Island — and they want to see it here.

Beyond closing the state’s non-essential businesses — while leaving giant retailers like Home Depot open, creating a demoralizing state of haves and have-nots — and ordering people to wear masks, Baker has provided little real leadership on the question of when and how the state’s economy will reopen. And groups like the Greater Boston Chamber of Commerce are starting to demand some answers.

The GBCC and other groups want answers on childcare — those facilities have been ordered closed until the end of July — as well as on public transportation, testing, tracing, and more. They want more than a target date for reopening the economy — they want a plan. The governor’s doesn’t have one yet, and this is a big reason why there is more than a whiff of defiance in the air.

This lack of a plan when most all other states have one is just one example of a lack of real leadership from the Baker administration to date. Here are some others:

• The Soldiers’ Home. This is one of the great tragedies during this pandemic and Baker’s greatest failing thus far. To date, roughly 30% of the 226 residents who were living at the home when the first resident there succumbed to COVID-19 have died. The situation has stabilized, but only because there are many fewer residents. Yes, most of the residents are very old, and nursing homes have been especially susceptible to outbreaks. But a number of lapses enabled the virus to sweep through the Soldiers’ Home like wildfire.

Baker claims not to have known about the outbreak until March 29, by which time several veterans had died, and he further said he was “appalled” by the lack of reporting by the man he appointed to lead the facility, Bennett Walsh — who has no experience running a healthcare facility on his résumé. Meanwhile, Walsh disputes the governor’s accounts, saying he provided daily updates to state officials.

Who’s telling the truth? In some respects, it doesn’t matter. There has been a massive failure of leadership on this matter, and it starts at the very top.

• Golf. To those who don’t play the game, this seems trivial, but golf is a good example of Baker being stubborn and not using basic common sense. There are dozens of businesses that would love to be called ‘essential’ and reopen for business, but for most — restaurants, hair salons, tattoo parlors, and even most retail stores — social distancing is a real issue.

But golf? Most courses boast more than 100 acres, and the busiest of courses might have 100 people on them at given point. That’s one acre per person. It’s easy to social distance, people get exercise (especially if they walk), and at least one small portion of the economy gets to start the process of clawing its way back. New Jersey and even New York are opening golf courses. Massachusetts? Maybe someday. It just doesn’t make any sense.

• His Reopening Advisory Board. The 17-member panel, named last month, is now working “three, four, five hours a day on Zoom calls” with “different verticals” to come up with a plan, the governor said on April 30. The problem is, he should have been saying that weeks before. He knew the day he shut down non-essential businesses in late March that he would need a panel like this to provide needed guidance. He waited a month to put one together, and when he did, he made it far too small and didn’t include representatives from several key sectors, especially tourism and hospitality.

And then, he gave the panel until May 18 to come up with a plan. People doing business in the Commonwealth don’t want a plan on May 18 — they want to start opening on May 18.

We’re still in the early stages of this pandemic, which means Gov. Baker still has plenty of time to show he has what it takes to be a good leader. Right now, he’s getting spotty marks — at least from us — and, overall, a grade of ‘incomplete.’

Coronavirus Sections Special Coverage

Seeking Forgiveness with Little Guidance

By Scott Foster

The Paycheck Protection Program (PPP), part of the CARES Act, was launched just over a month ago to much fanfare and promise, but has been bogged down since with technical malfunctions, overwhelmed bankers, political missteps, and incomplete guidance from the U.S. Small Business Administration (SBA). Current guidance on the forgiveness of these loans is scant, additional guidance has been recently posted, and more is expected in the near future. The SBA’s FAQs for PPP have been updated several times a week since they were originally published on April 3, reflecting the current thinking of the SBA in interpreting the CARES Act.

Many businesses have already received their PPP loan proceeds and are wondering: how should I use these funds? How do I document that use? Will all of my PPP loan be forgiven? Unfortunately, until the SBA issues complete guidance — or Congress amends the CARES Act, which is quite likely — we are all in a bit of limbo, but let’s start with what we know today.

What is the covered period? The eight-week period starts on the day your PPP loan was disbursed/funded. Therefore, if your loan was funded on April 15, your covered period should be from April 15 to June 9. Only expenses that are related to the covered period are potentially forgivable.

What expenses are forgivable? First category: payroll expenses, including health insurance and retirement expenses, subject to a cap of $100,000 per year for salary per person. This translates into a $15,384 cap on forgivable compensation. Self-employment income is included in payroll expenses, but the amount that can be forgiven is 8/52nd of that individual’s self-employment income for 2019. Second category: rent (or interest payments on your mortgage) and utilities. But the forgivable amounts in this category cannot exceed 25% of the total amount to be forgiven (said another way, these expenses cannot be greater than one-third of your payroll expenses). Therefore, incurring payroll expenses during the covered period is critical to receiving any loan forgiveness.

If I have $100,000 in forgivable expenses, but I have fewer employees on payroll, does that matter? Yes. The CARES Act provides that any forgiveness is reduced proportionately to the extent your full-time equivalent employees (FTEs) during the covered period are fewer than the FTEs your business had either at the start of 2020 or early 2019. However, the CARES Act also provides that, if you rehire any employee laid off between Feb. 15 and April 26 by June 30, that employee then counts as a FTE during the covered period (but this won’t increase the amount of your potential forgiveness, since the forgiveness is based on your actual payroll expenses in the covered period).

I laid off several employees, but now that I have the PPP loan, I’m ready to hire them back. However, they are making more on unemployment (with the $600-per-week temporary federal bonus) than I can pay them. Now what? There are a bunch of interrelated issues here, but the bottom line is this: as long as you offer the employee their job back, then they should no longer qualify for unemployment, and the SBA has indicated that, if the employee doesn’t return after you offer them their old job, that won’t count against you for the FTE test. This is one issue that members of Congress have cited in a push to amend the CARES Act to extend the covered period for certain impacted businesses, so there is a chance we will see an amendment that would, for example, extend the covered period to 16 weeks.

What documentation will I need to provide to get forgiveness? At a minimum, you can expect to need to provide the same information you provided to obtain the loan: payroll records (ideally a report from your payroll provider), proof of rent payments, utility bills, and a copy of your lease. You will also need to document the number of FTEs you have during the covered period and compare that to the number of FTEs that you had in either the 2019 or 2020 testing period.

Should I put the PPP loan proceeds in a separate account? Ideally, yes. This is a recommended best practice. You will need to show that you used these funds for their intended use. If the funds are co-mingled with other funds, that might make it more difficult to demonstrate how the PPP funds were used.

We are an essential business and have not felt any significant negative effects yet. Can we still use the PPP loan funds? This is one of the murkiest areas, and we need further guidance from the SBA, especially in light of recent unhelpful comments from U.S. Sen. Ron Johnson and Treasury Secretary Steven Mnuchin. On one hand, every business is America is facing some degree of uncertainty, even if you are up and running. What happens if one of your employees get sick? Or if a major customer shuts down? Or a supplier is unable to meet your needs? On the other hand, if you truly are not feeling any impact, then was the certification you made on the application (“current economic uncertainty makes this loan request necessary to support the ongoing operations”) really accurate?

We are recommending that you document the uncertainty your business is facing, even if the uncertainty never comes to pass, along with any steps you are taking and costs you are incurring to mitigate the risks. For example, did you increase pay to your employees during the state of emergency? Have costs associated with cleaning or sanitizing your facility increased? You may also want to document what you would have done had the PPP loan not been available. For example, would you have reduced hours or furloughed employees in anticipation of decreased income?

My business is currently closed due to the governor’s order. What should I do? The only way to have any portion of your loan forgiven is to spend the proceeds on payroll. You either need to try to hire back your employees (maybe to only lay them off again at the end of the covered period) or pay back the unforgiven portion of the loan (which is accruing interest at the rate of 1% on any amount not forgiven). Currently, there is no way to use the PPP loan proceeds after the covered period and have those expenses forgiven.

Scott Foster is a partner at Bulkley Richardson.

Coronavirus

Opinion

As we survey the new landscape created by COVID-19, it’s very difficult to find any positive news.

Indeed, businesses are shuttered, jobs are being lost, the closure order for non-essential businesses has been extended until May 18, question marks dominate talk of restarting the economy, and, overall, fear and uncertainty hang over the region like dark rain clouds.

If there is positive news — beyond the ways that individuals and businesses are rallying to support first responders and frontline workers during this crisis — it is that businesses are using the pandemic as a learning experience. And beyond that, they’re utilizing the pause that many of them are enduring to take a long, hard look at everything they do and how they do it — and essentially question everything.

And when we question everything, we often find some intriguing answers.

There are many reasons why we don’t question everything. Often, we’re busy doing other things, such as running our business day to day. Also, this is a difficult exercise that requires not only time but a deep commitment to peeling layers, getting to the bottom of things, and not being afraid of hearing answers to our questions. But often, the reason why we don’t question everything is because things are going well — or we think they’re going well. And why would we stop and question things when we’re doing well?

The pandemic has changed all that. For starters, most people aren’t doing particularly well at the moment. And some, tragically, aren’t doing anything at all. They are completely shut down because they are not considered essential. Meanwhile, some people have more of that most precious commodity — time — than they’ve ever had.

And some others have been left with no option but to rethink what they do and how they do it, because they simply can’t do it that way in the middle of a pandemic when everyone has been ordered to stay at home.

Add it all up, and most businesses, institutions, and nonprofits are using these times to do the proverbial deep dive.

Restaurants are looking at their menus, their presentation, their staffing, their locations, even their wine lists. Nonprofits are looking at how they raise funds and when. They’re also looking at their missions and how they might be altered, broadened, or even tightened. All businesses are looking at how they communicate, how they meet, how many employees they really need, how many of these employees can actually work better from home, and how many square feet of space they actually need. They’re also looking at whether they need to diversify and develop more revenue streams moving forward.

The word you hear over and over and over again is ‘pivoting.’ Some businesses and nonprofits are already doing it. Others know they have to do it. Still others are asking the questions needed for them to know how to do it.

We call this a positive development, because this is what entrepreneurs and companies need to be doing all the time. The best, most efficient companies in the world are constantly looking at what they do and how they do it in a search for ways to continuously improve.

It took a pandemic, but now most every company is doing it. They’re questioning everything.

At a time when positives are hard to come by, this one stands out.

Coronavirus Sections Special Coverage

Dropping Down a Gear

By George O’Brien

Steve Lewis spends a good amount of each winter in Florida, and this year was no exception. He was planning on returning to the Northeast in late February, but eventually saw little point in doing so.

As February turned to March, there was even less incentive.

“I figure if you’re going to work from home, you might as well do it where it’s warm and sunny, and where you can play golf,” said Lewis, owner of Steve Lewis Subaru in Hadley, whose Florida address is the Delray Beach area.

But, make no mistake, he is, like most people, WFH, and from Florida he has a very clear picture of what’s happening at his dealership — and within the auto industry itself — during this pandemic. As it is for most all businesses, this an ultra-challenging time that comes with some learning curves and a great deal of uncertainty about what’s going to happen over the next several months.

Sales for March and April of this year are down roughly 50% from what they were over this same period last year, said Lewis, echoing others we spoke with on that estimate. Meanwhile, service work is better, but not as good as in ‘normal’ times. Meanwhile, methods of doing business have changed, with both sales and a good amount of service being undertaken with the customer never visiting the dealership.

And as the pandemic continues, many in the industry, including those we spoke with, said these trends will continue, to one extent or another, even after people are talking about this virus in the past tense.

“We saw this coming — we slowly started to see this change,” said Carla Cosenzi, president of TommyCar Auto Group, referring to everything from online buying to pick-up and drop-off for service work. “We were one of the dealers that believed this this was going to be the future, and I believe this will train the consumer on just how easy it is to buy a car online. And I think this will push online buying to happen for car dealers sooner than it may have if the virus hadn’t happened. But this was coming.”

As for volume of sales, it is obviously down dramatically, as those projections for year-over-year numbers would indicate. But they’re actually better than some people thought they might be, and they might get better still if consumers gain the confidence to take advantage of a number of incentives now being offered.

“I don’t think I’ve seen a better time to buy in all the years that I’ve been in this business,” said Lewis, who has a roughly a half-century under his belt. Elaborating, he listed everything from lower sticker prices to deferred payments; from gas prices now under $2 a gallon (and likely headed lower) to lower insurance costs resulting from people driving less.

Peter Wirth, co-owner of Mercedes Benz of Springfield, agreed that these incentives might be enough to inspire some people who were thinking about buying or leasing and needed something to incite them to action.

“There are some people where it doesn’t matter what the incentives are, they won’t buy a car, and there are people who would have bought the car with or without the incentives,” he explained. “And then there this is middle piece where you can maybe push someone over the edge — they’ll buy if they think they’re getting a really good deal. That has happened, and it’s probably going to continue to happen through May and into the summer.”

And if these incentives aren’t enough, there’s ongoing speculation that, because many car manufacturers have shut down entirely or shifted to making respirators or other products, there may come a day — when, no one can really say — when getting the model you want might become more difficult.

For now, the lots are full, manufacturers and dealers are providing incentives to help clear that inventory, and the world waits to see if and when the economy improves to the point where more people gain the needed confidence to make such a large and important purchase.

That’s the view from Florida, and right here in Western Mass. as well, as this sector works to drive through something that no one currently working within it has dealt with before.

Hitting the Brakes

Lewis told BusinessWest his main role at the dealership with his name on it is to act as a type of cheerleader for his staff. And in the middle of a pandemic, if that’s where we are, there isn’t much need for a cheerleader.

“I get people up and running, but the people who are there are maxed out,” he explained. “We’re bringing people back bit by bit because our business is increasing on a daily basis, but we’re certainly not there yet.”

Elaborating, he said maybe half the company’s employees are back at the dealership, with the service department “insanely busy,” as he put it, and sales working its way back, but volume still well off last year’s pace during what is traditionally a good time for dealers.

On the service side, Lewis, like others we spoke with, said there’s a lot of recall work being done, and some routine, or scheduled, maintenance, but certainly not as much, because people aren’t driving as much, and they’re less inclined to visit the dealership for service — even those who drive the brand he sells.

“Subaru people are very diligent — if they’re 200 miles over their oil change, they think they’re going straight to hell,” said Lewis. “They say, ‘am I OK, is everything OK?’ And we say, ‘yeah, you’re OK.’”

Meanwhile, much of the service work being undertaken doesn’t involve visits to the dealership anyway, as those we spoke with said the pick-up/drop-off method is becoming increasingly popular, and it is likely to stick once this is over. And even those who do come to the dealership for service can’t hang out in the waiting room — at least to the extent they once did — so they’re given a loaner car, even if it’s only for a few hours.

To conduct this type of service, a dealership needs to build an infrastructure, meaning both staff to do the picking up and dropping off and the loaner cars to be left with customers while their vehicle is being worked on. And those we spoke with have been doing just that.

Indeed, Cosenzi said TommyCar saw this coming and put an operation in place. It’s called TommyCar Go.

“We had the infrastructure in place before COVID-19 struck, so it wasn’t a difficult transition for us,” she explained. “We already had the loaner fleet, we already had the personnel in place, we already had the advertising in place and the website organized; for us, we were ahead of the curve when many other dealerships were scrambling to get their operations in place.”

Wirth said Mercedes-Benz now has a fleet of 40 brand-new cars and a team of staff members he would like to grow that is assigned to picking up and dropping off, a service that was starting to catch on before the pandemic forced everyone into their homes, but now has become much more popular.

“Consumers are adjusting to a new normal — they’re not done adjusting, but they are getting more used to it,” he told BusinessWest. “We’re doing more pick-up and drop-off than we ever have before, and we were doing a fair amount before that. And on the flip side, we’re very active with reaching out to people to get service campaigns or recalls that were pending that we would ordinarily just take care of the next time the car comes in.

“And some of this is going to stay with us; consumer behavior will change — it won’t be 180 degrees, but it will be different, and more people will be comfortable with pick-up and drop-off,” Wirth said, adding that his dealership is working to improve the process and is currently researching an app that will enable customers to track where the driver is and when he or she will make that pick-up or drop-off.

Providing Incentive

Meanwhile, patterns are changing on the sales side, again out of necessity. Consumers are doing their shopping online, and increasingly, they’re getting into a new car without having to get into the showroom. And often without leaving their home.

Buyers are directed to the dealers’ websites, the paperwork is now handled via e-mail and DocuSign, and cars are either picked up outside the dealership or, increasingly, in their driveway. And in keeping with the times, the cars are thoroughly sanitized before the keys change hands.

“These are hermetically sealed — they’re like an operating room when people pick them up,” said Lewis, echoing the sentiments of others and speaking for them when he said that dealers are doing their best to make sure buyers get a full tutorial on how everything works, even if the sales associate isn’t sitting in the passenger seat explaining each feature, as has historically been the case.

“Through the internet, we go over the car as best we can,” he explained. “And we invite them back in when this is all over for a complete tour of their automobile.”

Cosenzi agreed. “We’ve done a lot of FaceTiming and Google conferencing, and we’ve set up every kind of conference, from Skype to Google — whatever the customer wants,” she said in reference to creating opportunities to learn all about their car. “There’s been a lot of Webexing.”

As for sales volume, as noted earlier, those numbers are well off last year’s pace, but in some respects better than some might have expected given the damage done to the economy, the huge numbers of people now unemployed, and the high degree of uncertainty when it comes to the future and when the region and the country can return to something approaching normal.

“The way we’re tracking now, April’s going to be about 50% of what it was last year, which is better than we thought,” said Wirth, noting that all the sales have been handled online. “In the beginning, people were thinking that there was no business to be had, but gradually things improved.”

Cosenzi agreed. “There was a lull at the beginning when this first happened,” she noted. “I think everyone was in shock and was really scared. But now, the manufacturers have come out with so many amazing offers, we’re seeing people want to take advantage of that.”

Indeed, the incentives have come in a number of forms, from lower prices, to deferred payments, to protection if the buyer loses their job to COVID-19, and they are commanding the attention of many consumers.

Because most sales are internet-driven, Lewis said, he’s drawing business from a wider geographic area as people shop for the best deal.

“People are really shopping for the best dollar now,” he explained, “because there’s no sales personality involved in the sale; it’s all through the internet, and it’s all about who has the best price, and our pricing is such that we need to move their cars.”

Indeed, his dealership, like most at the moment, has plenty of cars. Lewis said his dealership has a full lot, more cars stored elsewhere, and it’s currently holding up cars at Subaru’s port of entry in Rhode Island.

“We have 150 new cars in stock, and about 100 used cars in stock,” he noted. “That’s about a month’s supply normally, but now it’s a two-months’ supply; we’re paying interest on them, so we’ve got to move them once the floodgates open; I could probably have 300 cars on site right now that are either delivered and on the lot or allocated to us, and we’ve held their delivery up because we don’t have any place to put them.”

Lots of Questions

If sales pick up, as some project they might, and those inventories are depleted, getting new supplies of cars might become more difficult until the manufacturers ramp up production again, noted those we spoke with.

But that day is far off, and there is still a great amount of uncertainty about what can and will happen over the next few months or even the next few weeks, as the stay-at-home order has been extended to at least May 18.

For now, dealers are coping with lots of cars, lots of questions, new ways of doing things, and trends that might become the new norm.

It’s all part of life for a sector that was moving in the fast lane but has had to drop down a gear — or two. Or three.

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

Coronavirus

Trial by Fire

STCC respiratory-care students

STCC respiratory-care students Stefani Glukhova and Max La work at Baystate Medical Center.

Tallon Tomasi used to punch the same clock everyone else does when starting her shift as an LPN at the Leavitt Family Jewish Home in Longmeadow.

Not anymore. Because she works in a COVID-positive unit at the skilled-nursing facility, she enters by a different way than those in the negative units.

“Now, when we come in, we do this check-in system where we wash our hands, get our temperatures taken, we’re asked about symptoms related to COVID, about recent travels, recent exposure to people who have traveled. Then we get our gear, we wash our hands, and go to work.”

As a nursing student at Holyoke Community College, Tomasi is just beginning her healthcare career, and doing so right on the front lines of a global pandemic the likes of which haven’t been seen in more than a century.

Some aspects of it are tough to bear.

“The thing that’s very hard is not having family members being able to come in and see their loved ones as we are going through this difficult time,” she told BusinessWest. “Some of our patients have dementia, and not being able to see their families, it is challenging.”

“The thing that’s very hard is not having family members being able to come in and see their loved ones as we are going through this difficult time. Some of our patients have dementia, and not being able to see their families, it is challenging.”

That said, “I think our facility has done a good job,” she went on. “We do phone calls with family, and we do FaceTime, so I think that helps a little bit. But not being able to physically touch loved ones is hard for some of the patients and their family members.”

Tomasi paused to consider what else has been challenging about working in healthcare during the time of COVID-19.

“Everyone is so fearful of not knowing what’s going to happen,” she finally said. “That’s a big problem. We are not fully aware of how this thing will go, how to treat it, so the new big problem is fear — fear of the unknown. We don’t know everything about it, there’s anxiety around it, and I sometimes get scared because I know that I have the ability to spread it. But you know what has to be done — you have to help.”

With graduation — such as it is this year — just around the corner, many more nurses and other healthcare professionals are getting ready to transition from college into full-time work, but they’re facing an uncertain job market when so much of the sector’s energy is tied up in simply containing the pandemic.

“I checked in with some of our soon-to-be-graduates, and as far as the job market goes, I would say it’s pretty much up in the air and confusing,” said Kathleen Scoble, dean of the School of Nursing at Elms College.

On one hand, she noted, Hartford Hospital and St. Francis Hospital just down I-91 have responded “pretty expeditiously” to graduating seniors, several of whom landed positions right away. On the other hand, Baystate Medical Center has informed applicants that its new-graduate nursing program, traditionally a very popular landing spot for Elms grads, has been postponed.

Brooke Hallowell

Brooke Hallowell

“We have mechanisms to do more triage and problem solving with patients before they come to a place where they’re exposing themselves to others.”

But the need is great, she added, and Elms President Harry Dumay agreed, adding, “I’m proud of being part of this sector and proud of not only our institution, but all students and graduates on the front lines during these difficult times.”

Even if, as we’ll see, it can be a little challenging getting to those front lines.

Field Work

For Springfield Technical Community College, which boasts the largest health-simulation center in the Northeast, students not having access to campus means not being able to use those tools in their training, President John Cook said.

“That does hinder the potential of our students to finish, graduate, and work in these fields, which, if they weren’t in demand before, are certainly in demand now.”

That’s a major factor in nursing right now, Scoble said.

“If you ask students what our major responsibility is, it’s preparing them for licensure; it’s our primary responsibility as a program, to make sure they meet all their graduation requirements. And that has been a keen challenge the last semester; all of our clinical learning experiences were canceled — understandably.”

Carol Leary, president of Bay Path College, also noted that nursing students have had their clinicals put off — and there’s only so much that can be accomplished online.

“For me, that is a concern because many of them need to sit for their licensing exams before they can begin to work,” she said. “The accrediting bodies are trying to work with all the programs across the country to figure out how students can sit for exams.”

Scoble noted that only one testing site is open in the entire state where nursing students can take their licensing exam, known as the NCLEX, and that site is following CDC requirements for social distancing. “So you can imagine, with thousands of nursing graduates in the state, how long it will take for them to test the class of 2020. But they’re trying to open as many sites as they can.”

In Gov. Charlie Baker’s guidance when shuttering the Massachusetts economy in March, language was included allowing new nurses to practice without a license, if supervised by a professional nurse of equal or higher education.

“It’s really up to the employers how they would receive a new graduate who is not licensed, how they would recruit and receive them,” Scoble said. “We would provide any supporting documentation they would require.

“I checked in with some of our soon-to-be-graduates, and as far as the job market goes, I would say it’s pretty much up in the air and confusing.”

In the past, she explained, a typical student would agree to a position in early spring, then take the exam in June and start work around July.

“All that is unknown right now. Students would say the only thing they can control is finishing the program and preparing for NCLEX. We’re stressing to our soon-to-be-graduates to prepare for the NCLEX — and continue to prepare — until they have the opportunity to sit for the exam.”

In a similar situation, three respiratory-care students from STCC recently began working at Baystate Medical Center after applying for and receiving limited permit licenses, said Esther Perrelli Brookes, director and department chair of the Respiratory Care program. Eight other students have applied for limited permit licenses so they can work in the field.

“Students chose to study respiratory care because they want to help people. They want to make a difference,” Perrelli Brookes said. “I’m extremely proud of my students who are stepping up during this unprecedented health crisis. I’ve had many students reach out to say they want to find out what they can do now. I’ve been helping them get their limited permit licenses.”

“I was one of the first in my class to do it,” student Max La said. “It’s a good learning experience because other respiratory therapists are there and you can learn from them.”

The limited permit license means he can perform certain tasks, but not everything a fully licensed respiratory care therapist would do. “We can’t touch the ventilators,” he said, referring to the devices that some seriously ill COVID-19 patients use in hospitals.

At Baystate, La does not work with COVID-19 patients, but must wear a gown, mask, and other personal protective equipment (PPE), and he said Baystate takes precautions to protect him and others from contracting the coronavirus. “There’s always concern, but Baystate has a good policy. Everyone has masks, and they do temperature checks when everyone is walking in.”

STCC’s respiratory care program trains students skills in treatment, management, diagnosis and care of patients with breathing problems associated with diseases such as COVID-19.

According to the U.S. Bureau of Labor Statistics, respiratory therapists will continue to be in high demand at hospitals and medical facilities, with job growth of 21% projected between 2018 and 2028 — and that was before COVID-19 wrought what is essentially a respiratory crisis around the globe.

Seeds of Change

Demand should remain high in many health fields, said Brooke Hallowell, dean of the School of Health Sciences at Springfield College, though it may be uneven in the short term. Take physical and occupational therapists — in emergency-care settings, they’re playing an important role in patient care. But those who work with post-surgical patients for, say, joint replacement may find work more intermittent as many elective procedures are being postponed.

One area of growth is in the realm of telehealth, she added. “All of our health professionals are going through a rapid transition in terms of telehealth access, and Medicare and insurance companies are adjusting their policies related to telehealth, and reimbursement for telehealth visits is being revamped.”

These efforts are intended to reduce the spread of COVID-19, but the lessons being learned may be long-term, Hallowell noted.

“Instead of waiting in a room full of sick people to be seen at the doctor’s office, we have mechanisms to do more triage and problem solving with patients before they come to a place where they’re exposing themselves to others. I think this is here to stay … how we carry out our practices will be changing in big ways.”

Interest in some health programs may shift as well, she added. For example, cardiopulmonary rehabilitation, a specialty within physical therapy, is getting more attention for the vital role it plays in COVID-19 treatment. And Springfield College is probably launching its new undergraduate program in public health this fall at the right time, too.

“We expect that will be a popular major, as people become more aware of what public health and epidemiology are,” Hallowell said. “That’s good timing for us.”

Christina Royal, president of Holyoke Community College, told BusinessWest that a great deal of first responders, nurses, and other healthcare workers have taken classes at community colleges like HCC at some point.

“When I think about our role in ensuring that we have the workforce talent we need in healthcare, which is the primary sector in Western Mass., I think it’s important that we continue to think about the kind of training we’re doing and how to continue to support this community.”

Scoble doesn’t foresee a time when nursing is not an in-demand profession.

“I’m not sure what we’re going to experience over the next few months,” she said. “A lot has to do with how we come back as a country, as a state, and as a community, but I have no doubt that every single one of my graduates will land a position at some point. If this was a normal period of time, a normal spring, many of the graduates would be on the fringe of accepting a position. They would have had interviews and been called back. Right now, a lot of that is at a standstill.”

When they do land jobs, Scoble added, “they’ll have the knowledge and skills and competencies, but lack a great deal of experience. So my number-one concern is, will they enter a work environment where they have the kinds of orientation and support they need? It’s definitely a concern.”

Stefani Glukhova, one of STCC’s respiratory-care students who started working at Baystate in March, may put some of those concerns to bed.

“All the staff here are very kind and generous and are always willing to help you,” she said. “As it gets busier at the hospital with fighting COVID-19, the registered respiratory therapists work around the clock to help fight the virus. My fellow classmates and I do our very best to be available and help out with treatments, floor therapies such as chest physical therapy, and much more.

“This is an amazing learning experience that I would recommend,” she concluded — even if it comes during a pandemic that no one would ever recommend.

Joseph Bednar can be reached at [email protected]

Coronavirus Sections Special Coverage

The New Math

Julie Quink noted that, at her accounting firm — as well as most others — it is tradition to have a large party on April 15, the tax-filing deadline, or perhaps the 16th.

Steve Erickson

Steve Erickson

Patrick Leary

Patrick Leary

Julie Quink

Julie Quink

Jim Barrett

Jim Barrett

These are celebrations of hard work well done, she told BusinessWest, adding that staff members who have been under a great deal of stress and working long hours and long weeks can take a deep breath and relax, knowing that the worst is over for another year.

This April 15, there was no party at Burkhart Pizzanelli, the firm she serves as managing partner, or at most other firms. And it’s not just because the filing deadline has been extended to July 15 by both the state and federal governments.

It’s because there is still a great deal of stress, and the long hours continue as accounting firms play a huge role in trying to help their clients get to the other side of the COVID-19 pandemic.

“On a personal level, I’ve probably never worked as hard in my entire career as I have this year,” she noted. “I’ve put in many more hours than I have other years, and I know others have as well.”

Quink was one of several area accounting-firm executives to speak with BusinessWest as part of the latest in a series of virtual roundtable discussions concerning COVID-19. Those at the ‘table’ said these are, quite obviously, different times for accountants. While some of the work hasn’t changed, like all those tax returns, some of it has, including efforts to help clients of all sizes and in virtually every sector file for disaster relief (especially through the Small Business Administration’s Paycheck Protection Program), and — now that the money has started coming in — properly manage those funds so that the loans granted are forgivable.

But the work goes well beyond helping clients fill out the necessary paperwork, said Steve Erickson, CPA, partner in charge of Whittlesey’s Holyoke office. He said clients need to carefully manage cash flow, and they also need plans for the short and long term as they address life during — and after — this pandemic, and his firm, like others, has stepped in to assist with this often-difficult work.

“The biggest concern we see is cash flow and advising clients on what’s coming down the pike and making good long-term plans for whatever they’re doing,” he told BusinessWest. “And each one of them is unique; I can’t say that there’s one that’s very similar to the other.”

Meanwhile, the manner in which work is being done is obviously changing as well. Many of those we spoke with are working at home — some or all of the time — while discussions with clients and co-workers are now done mostly by phone, e-mail, or Zoom. And since accountants are working with clients’ sensitive financial information while at home, proper protocols and security measures have been added.

There are lessons being learned. Summing up the comments offered, it seems that those in accounting work much more efficiently — and certainly communicate much better — when they’re together in the same office, sharing ideas and collaborating. As for clients … the remote meetings have worked well, for the most part, and they may be the preferred method moving forward.

“From a positive standpoint, this has shined a bit of a light on our firm as far as our processes, our policies, how we can do things better, and what we should be looking to do better, said Patrick Leary, CPA, a partner with Springfield-based MP CPAs. “Hopefully, we’re going to learn from this and everyone else will learn from this and make themselves a stronger firm.”

“The biggest concern we see is cash flow and advising clients on what’s coming down the pike and making good long-term plans for whatever they’re doing. And each one of them is unique; I can’t say that there’s one that’s very similar to the other.”

Overall, this has been, and will continue to be, an intriguing, challenging, and in most all ways rewarding time for accountants, said those at the virtual table. Clients are calling them — and leaning on them for help — like never before, and as a result, relationships are being strengthened, and new ones are being formed.

Jim Barrett, managing partner at Holyoke-based Meyers Brothers Kalicka, said that, for some time, his firm — and most all firms, for that matter — have been working to broaden the umbrella of services to clients and develop relationships that are more advisory and consultative in nature.

The pandemic has in some ways forced the issue.

“This crisis has spurred us to do more consultative and advisory work with clients, not only with navigating the stimulus package, but also navigating any changes in their business, be it with employees or costs,” Barrett explained, adding that this work is certainly ongoing and is likely to continue for some time.

Beyond the Numbers

All through her career, Quink told BusinessWest, she’s prided herself on having the answers when clients have questions.

She still has most of the answers, but COVID-19 has changed that equation as well, because now, the questions are, well, different — in many cases, much different.

“This is my 29th year doing this, and I can’t recall a time when I’ve said ‘I don’t know the answer to that’ as much as I have these past few months, and follow it up with ‘I’ll have to get back to you,’” she told BusinessWest, adding that, in many cases, the answers don’t come easily.

That’s because clients are asking about whether to furlough employees or lay them off; or about whether employees can be ordered back to work; or about how to handle a situation where a laid-off employee is making far more on unemployment than they would on the job — and, therefore, wants to stay laid off; or about what to do with employees who must stay on the payroll for the loan from the SBA to be forgivable, but have no work to do because the business can’t open yet because it’s not deemed ‘essential.’

“People who scrambled to apply for the loan as soon as they could for fear that the funds were going to run out are now starting to receive those proceeds, and they’re asking, ‘if I bring my employees back, what am I going to do with them?’” said Leary, noting that there are many types of businesses that fall into this category. “Do they paint the walls?

“If you’re a lower-wage earner, and you can make the same or more on employment, what’s the incentive to go back to work and help my employer have some of his loans forgiven?” he went on. “It’s a predicament that a lot of companies are facing, and we haven’t seen any real guidance on it.”

Coping with such questions is a new reality for accountants. Actually, it’s one of many new realities. And they all come on top of the oldest of realties — tax season.

Add it all up — pun intended — and this has been a very different start to the year for accountants. Things began as they generally do, with tax-return work starting to flow in during the winter months and building toward the annual late-March, early April crush. By mid-March, though, as the pandemic reached Western Mass., and especially after non-essential businesses were ordered closed on March 24, things changed dramatically.

Clients were suddenly thrust into a situation unlike anything they’d seen before, said Barrett, and they were calling their accountant in search of some answers and, more importantly, some guidance.

“There’s a lot of companies and medical practices who have never gone through this before, and they’re doing the appropriate thing … their financial people are going through their expenses, they’re going through what needs to be paid and what should be paid — basic business decisions that they’re trying to make under a period of duress,” said Barrett. “What we see is that either the company doesn’t have a financial person — it’s the owner asking us — or they do have a financial person, and that person is, for the most part, by themselves, and they’re looking for advice or just want to bounce their plan off someone to see that it makes sense.”

And as clients started calling with new and different needs, accountants were having to adjust to new ways to work.

Indeed, most have been working at home — another of those new realities that brings its own set of challenges — and thus communicating with clients and colleagues alike in ways other than face-to-face.

“We’ve instituted procedures and policies that we never had before because we’ve never had that many people working out of the office,” said Barrett, whose sentiments were echoed by others at the ‘table.’ “We’re still fine-tuning those moving forward, but it’s changing the way we work, without a doubt.”

Erickson agreed. He said Whittlesey closed its three offices on March 18 and went to remote access. Like everyone else who’s gone through it, he called it a learning experience.

“It was a little bumpy at first, just getting used to the whole thing and trying to stay out of the kitchen and all the snacks in there,” he noted. “But, overall, it’s gone smoothly.”

Quink noted that, while Burkhart Pizzanelli has closed its office to outside traffic, some staffers still come to the office most days, and carefully practice social distancing — while taking a number of other steps in the name of safety — while doing so.

“We’re not on top of each other; we have a nice layout so we can maintain the appropriate distance,” she explained. “At lunchtime, it might look like you’re looking at the royal family — there’s one on one end of the table and one at the other end, and we’re always going around and reminding each other about being safe and taking the steps to stay safe; we emphasize that, if one of us goes down, the entire firm is down.”

Forms and Function

But it’s the nature of the work, more than how it’s carried out, that has been the more dramatic, and impactful, change for accountants.

Much of it has involved filing for PPP relief and now helping clients carefully manage that money, but, as noted earlier, it goes well beyond that.

There are all those questions to answer, or try to answer, as the case may be, but there’s also the task of helping companies plan — something that’s very difficult to do in these times — for whatever might happen in the coming months.

“We have spent quite a bit of time with our corporate clients talking about cash-flow management and cash-flow projections,” said Leary. “We’re talking through ‘what-if’ scenarios with a range of clients that runs the gamut, from those in the cleaning-supply business who cannot get enough product in the door to those in the hospitality industry who have shuttered their doors.

“We’ve had some discussions with some distributors and manufacturers who are now being more cognizant of their suppliers and their inventory levels,” he went on, offering a specific example of the consultative work going on. “They’re looking at having redundant suppliers; instead of having just a West Coast supplier, they’re asking whether they should also have one from Canada or one in the Asia market. If borders get closed, do they have a redundant supplier, and what is the proper inventory level? There’s a lot of thoughtful planning going on.”

Erickson concurred, and noted that, while planning, clients of all sizes are grappling with the moment as well, and this means dealing with everything from cash flow to employment matters to discussions with the landlord and the bank about possible deferrals of payments.

Quink agreed and noted that, overall, there are important conversations to be had with clients. And while some of them, especially those with the cleaning companies that have more work than they can handle, are upbeat in nature, most are exactly the opposite.

“We’re having a lot of strategy conversations with clients, and the reality is that some of the clients we’re taking to … we know they’re not going to make it through this,” she said. “So we’re having the best conversations we can to position them so that when that happens — if it happens — they’re at least well-advised.”

While it’s difficult to see any silver linings to the current crisis situation, the accountants at the ‘table’ said they can find some in the way that clients are looking to learn from what’s happened and take steps to not only survive the pandemic but be a better, stronger company for the future.

“There are a lot of people proactively planning for the long term,” Leary said. “And to me, that’s positive; they’re not making impulsive decisions and thinking that this is going to close their doors permanently. It’s more, ‘when we come out of this, how do we do it better?’ And that’s encouraging.”

As for the accounting firms themselves, they’re dealing with the moment themselves, and it’s a challenging time. Most of the consulting work mentioned above is provided at the upper levels, by the partners, who, at the same time, are trying to manage younger staff members, many of them working remotely.

“We’re trying to juggle two things at once, and we’re frustrated that we can’t teach as much, and it’s difficult to manage younger people at home,” Barrett said. “Meanwhile, there’s that thought in the back of our minds … ‘boy, I hope we get paid for this.’”

Indeed, while firms are eager to help, they are advising clients knowing that the bills for their services may wind up at or near the bottom of the pile of those that get paid. Such fears are the basis for comments shared by many at the table that, while this will be a busy year, it may not be a good one when it comes to the bottom line.

This is just one of many stress-inducing matters to contend with during a year that will be unlike any other for the accounting firms in the region.

“The toll that this pandemic has taken on our team from the mental perspective is enormous,” said Quink. “It not just how it’s extended the season, but how it’s added a lot to our workloads.”

Bottom Line

Getting back to the annual April 15 celebration … Quink told BusinessWest there might be a party on July 15, when tax returns are now due. But maybe not.

Tax season will be over, but the work of helping clients navigate their way through COVID-19-generated whitewater will be ongoing.

That’s part of the new reality for accountants, and it will become the status quo for the foreseeable future. It will be a challenging time in many different respects, and one that gives new meaning to the phrase ‘taxing situation.’

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

Coronavirus

Mixed Bag

Matt Sosik helped Char Gentes

Matt Sosik helped Char Gentes secure a PPP loan through bankESB that kept Riverside Industries employees paid for eight weeks

Char Gentes calls the Paycheck Protection Program “a lifeline.” Her nearly 200 employees no doubt agree.

Gentes is the president and CEO of Riverside Industries, a nonprofit that serves people with disabilities, helping them find ways to achieve daily independence, from securing and maintaining jobs to undertaking activities like voting and going to the store.

In mid-March, the organization was shut down by the same mandate that has shuttered the doors on countless businesses and nonprofits across Massachusetts. Four weeks later, Riverside hadn’t laid anyone off — but that situation was unsustainable.

“We had been keeping our employees paid as we were waiting to hear what the state reimbursement was going to be; actually, a lot of nonprofits were doing that,” Gentes told BusinessWest. “The senior management, myself, and the board were all on the same page — we wanted to keep our employees home, we wanted to have their back, and we wanted, as much as possible, to continue to pay them 100% and make sure they had health insurance. These human-service workers are often people who live paycheck to paycheck.”

When bankESB approved a Paycheck Protection Program (PPP) loan to Riverside Industries, Gentes could breathe a little easier, as the loan will allow it to pay its employees for the next eight weeks.

“We’re grateful for those eight weeks, and we certainly hope to be able to open our doors sometime in June,” she said.

While Riverside’s Easthampton facilities are closed, its mission has not stopped, as the organization continues working with clients under a new remote service model. Without the PPP loan, Gentes said that she would be facing some difficult decisions on how to keep her organization operational.

That contrast — between desperation and relief — explains why so many small businesses are frustrated with the PPP, which quickly ran out of money, and also generated plenty of confusion in the banks where business owners applied for loans.

The PPP is a small-business stimulus program included in the federal government’s Coronavirus Aid, Relief, and Economic Security (CARES) Act. The PPP initially provided $349 billion for U.S. Small Business Administration (SBA) lenders like bankESB to fund loans to businesses in order to guarantee eight weeks of payroll and other costs to help businesses remain viable. To qualify, businesses must have 500 or fewer employees and demonstrate that they have been negatively affected by COVID-19.

When the $349 billion ran out in less than two weeks, the shortfall generated an immediate outcry — not only for a second infusion of funding, but because of news that large, national companies were claiming tens of millions in PPP funds while small businesses couldn’t get access.

That second round of funding — $310 billion in total, approved by the U.S. Congress on April 22 — may not last much longer, but banks have likely learned lessons from the first round.

Sense of Urgency

Matt Sosik, president and CEO of bankESB, remembers those first days of the PPP well.

“It was harrowing. They did, in fact, rush it because they felt the urgency … but the program was not ready for prime time,” he recalled. “When it rolled out, a lot of people were frustrated, but — and I’m not trying to sound defensive — I wish people wouldn’t blame local banks. We were in the dark; the customers knew what we knew, and it wasn’t enough. They didn’t provide enough instruction.

“In the end, we made it out on the other side, and we got caught up,” Sosik told BusinessWest in mid-April, noting that the three banks in the Hometown Financial Group family, including bankESB, approved $100 million under the program, and spent the next week getting money into the hands of the people who were approved.

“It was very, very difficult — a massive amount of work by our employees. They kept grinding and got us out on the other side of things,” he said.

U.S. Treasury Secretary Steven Mnuchin reported that, following the PPP launch, the SBA processed more than 14 years’ worth of loans in less than 14 days.

“The PPP enjoyed broad-based participation across the country from lenders of all sizes and a wide array of industries and businesses,” he noted. “From its start on April 3, PPP provided payroll assistance to more than 1.6 million small businesses in all 50 states and territories. Nearly 5,000 lenders participated in this critical program, including significant lending by community banks and credit unions. Nearly 20% of the amount approved was processed by lenders with less than $1 billion in assets, and approximately 60% of the loans were approved by banks with $10 billion of assets or less. No lender accounted for more than 5% of the total dollar amount of the program.”

“It was harrowing. They did, in fact, rush it because they felt the urgency … but the program was not ready for prime time.”

The majority of these loans — 74% — were for under $150,000, he noted, but that didn’t stop a swell of outrage following reports of large companies, from Ruth’s Chris Steak House to Hallidor Energy, claiming eight-figure PPP loans.

Few in Washington balked at the need for additional funding. The second round of $310 billion is part of a larger, $480 billion relief package that also includes money for hospitals and expanded COVID-19 testing. Of the $310 billion, $60 billion will be set aside for smaller lending facilities, including community financial institutions; small, insured depository institutions; and credit unions with assets under $10 billion.

The Next Wave

Bankers hope for a smoother process getting the new funds approved.

“It got off to a rocky start and got a lot of bad press — I Googled and found maybe one story with a remotely positive angle to it,” Sosik said, before coming back to Riverside Industries. “This is a story about the good parts of humanity — the work Riverside does and our ability to play a small role in helping them stay alive. They do such incredible work, such necessary work.

“Riverside is a strong organization financially,” he went on. “It’s just that, when funding isn’t coming in, it doesn’t have a war chest to keep dipping into.”

As for Gentes, she’s hoping the loan helps her not only take care of employees, but prepare them to return when the governor says it’s OK to open the doors and restart person-to-person services.

“When we’re ready, we need our workforce to come back, and we need them to be ready to come back,” she said, adding that the organization’s roughly 150 clients are called once a week, maybe twice, to make sure they’re OK. “We’re in the process of developing remote learning, and assessing what each client has available to them in terms of technology to make this happen.”

Countless other small businesses and nonprofits have equally pressing needs, and could use a lifeline, she told BusinessWest. “Without it, a lot of nonprofits will go under.”

Sosik likes hearing that.

“I have to admit, it’s heartwarming to make a difference,” he said. “And I’ve heard some other good stories. There’s so much uncertainty — ‘I’ve put all my blood, sweat, and tears into my business; is it all over for me?’ To relieve that pressure has been a heartwarming experience for us.”

Joseph Bednar can be reached at [email protected]

Coronavirus Sections Special Coverage

Shaky Ground

Curtis Edgin

Curtis Edgin says the status of jobs often comes down to how far along in the pipeline they are.

Kevin Rothschild-Shea had just gotten off a conference call with employees of his company, Architecture EL in East Longmeadow — one of many he’s undertaken since his team begam working largely remotely.

“We’re doing well. We’ve jumped to working remotely and continue to function,” he said. “We’re maintaining our focus on multi-family and affordable housing, which has been strong, and we’re fortunate to have a number of projects.”

Looking 12 to 24 months out, the outlook is a bit murkier.

“We’re fortunate to have a lot of work in the pipeline, but we’re definitely seeing a reduction in new work and jobs starting out,” he told BusinessWest. “Quite a number of projects have been put on hold given the economic and COVID climate, so we’re seeing new projects hit ‘pause’ to a greater or lesser degree.

“We feel pretty comfortable with the workload right now, but when we look down the road, there are definitely concerns,” Rothschild-Shea went on. “We just want to keep everyone working and employed, keep everyone safe, and keep doing what we do.”

Curtis Edgin, president of Caolo & Bieniek Associates in Chicopee, told a similar story as he keeps in contact with his team remotely as well.

“We’re still busy — it’s not quite as efficient as working side by side and collaborating,” he said, adding quickly that his team has had no problem managing a number of projects currently in the pipeline. After that, though…

“We’re fortunate to have a lot of work in the pipeline, but we’re definitely seeing a reduction in new work and jobs starting out.”

“I think there will be a long-term impact in that people will be afraid — or forced, based on economic reasons, to slow down — until things stabilize and get back to where they need to be,” he said. “Right now, it’s hard to ask taxpayers or a corporation to spend additional money when they’re worried about other things.

“For the near term, we’re going to be busy, then we’ll probably see a slowdown,” Edgin went on. “That’s more of a long-term impact that will eventually correct itself like any other construction cycle.”

That’s the hope, anyway. Meanwhile, as definitive answers about the eventual length of the economic shutdown, and the damage it will cause, are difficult to assess right now, firms continue to plan for an uncertain future.

Moving Forward

Edgin said Caolo & Bieniek has plenty projects in various phases, and how the pandemic affects individual project can vary dramatically between jobs.

“Some projects are able to maintain their schedule,” he noted. “One of our school projects is going on, there’s a lot of site work, so nothing keeps people from working at different ends of the site. At some other projects, interior ones, [COVID-19] is starting to impact the ability to perform the work if people are working side by side. It depends on the project.”

On the municipal side, he explained, everything that needs to be voter-approved going forward — that is, when city and town halls begin ramping back up — may be a harder sell, an any tax increases during these times of sudden unemployment will be met with resistance.

“On the flip side, with the interest rates being so low, now is a wonderful time to continue,” Edgin added. “Many of these municipalities have already secured the approval of taxpayers, selectmen, or whoever makes the decision to actually move forward, and a lot of them getting really great financing rates, getting a lot of mileage out of their dollar.”

On the private commercial side, many companies and developers will wait for the dust to settle. “If they’re already committed, if we’re already moving forward, typically they keep going. If they’re just about to move on a project, maybe they have just a little hesitation.”

Kevin Rothschild-Shea

Kevin Rothschild-Shea says his firm is on solid footing in the short term, but expects work across the industry to slow somewhat after that.

In addition to its usual array of multi-family and affordable-housing projects, Architecture EL has been tackling, among other things, a Holyoke project with Local 104 Plumbers and Pipefitters and a project for Theodores’ in downtown Springfield.

“They’ve had significant slowdowns, as all restaurants have, but continue to look down the road at their overall restaurant needs, and they’re looking to keep that project on track,” Rothschild-Shea said. Meanwhile, he understands that other businesses will respond to the current economic climate by tapping the brakes and preserving cash flow.

The architecture world has responded to the COVID-19 crisis in other ways, too. For example, the American Institute of Architects (AIA) launched a task force to help inform public officials, healthcare-facility owners, and architects on adapting buildings into temporary healthcare facilities.

“On a daily basis, I am hearing from our architects who feel a deep sense of moral duty to support our healthcare providers on the front lines of this pandemic,” AIA President Jane Frederick wrote on the AIA website. “As our communities assess buildings to address growing surge capacity, we hope this task force will be a resource to ensure buildings are appropriately and safely adapted for our doctors and nurses.” 

“I think there will be a long-term impact in that people will be afraid — or forced, based on economic reasons, to slow down — until things stabilize and get back to where they need to be.”

The task force has developed a model of ‘rapid-response safety space asssessment’ for AIA members that will include considerations for the suitability of buildings, spaces, and other sites for patient care.

“This is a race against time for healthcare facilities to meet bed surge-capacity needs,” Kirsten Waltz, president of the AIA Academy of Architecture for Health and director of Facilities, Planning, and Design for Baystate Health, also noted on the website. “This task force will help inform best practices for quickly assessing building inventory and identifying locations that are most appropriate to be adapted for this crisis.”

Waiting Game

Meanwhile, life goes on for local firms like Architecture EL, even if the team can’t see each other face to face.

“We see a little loss of efficiency in terms of communicating, trying to connect with the team, but we’re doing well on that front,” Rothschild-Shea said, adding that he conducts at least three project-management conference calls a week. “I’m looking forward to the camaraderie of working together.”

He believes companies, in architecture and elsewhere, will take lessons from these many weeks of remote work, many of them positive, if only an understanding the capabilities technology-supported teams have to do things more efficiently.

“It’s a whole different way of working,” he added. “We’re already looking down the road at the so-called recovery and how we will reintegrate and get back to work. But we expect there will be some changes for the better. We’re trying to look at the positives.”

Edgin said Caolo & Bieniek, like other firms, is able to keep employees busy in the short team because of the long arc of many projects, but no one can really predict the impact of a sustained economic shutdown.

“It’s different here than in retail, where you need to have someone coming through the door purchasing something to pay the sales clerk,” he noted. “We’ve got things in the works in the near term. As for the more intermediate term and the future … we’ll see.”

Joseph Bednar can be reached at [email protected]

Coronavirus

Opinion

By George O’Brien

May 4.

Who would ever have known that so much importance would be attached to such a random date on the calendar?

But here we are in late April wishing that May 4 would come. It’s sort of like Christmas or your birthday when you were 5 years old. You couldn’t wait for it to get here, and you inevitably started counting down the weeks and then the days, wishing it would get here faster.

But this is much, much different.

May 4 is the slated end of Gov. Charlie Baker’s already-extended stay-at-home order, imposed to flatten the curve and slow the spread of the COVID-19 pandemic. Not that anyone uses an actual calendar anymore, but people have had that date circled for weeks now. That was the date that maybe, just maybe, things could start returning to normal.

People are still hoping that, but overall, there isn’t much hope May 4 will be that day. Massachusetts is still a hotspot for the virus, and the governor says the Bay State is still very much still in the ‘surge.’ Any day now, it’s likely he will announce the stay-at-home order has been extended. It might be a few weeks, it might be until June 1, it might be all the way to the end of the school year — not that school schedules should matter much. After all, the state’s economy does function in the summer, when children are out of school for 10 weeks.

No one knows, but what we do know is that soon there will likely be a new date to circle on the calendar, and a new date for wondering if that is when things will start getting back to normal.

This is no way for a state, for an economy, to function. But that’s the new reality.

Some states have decided they just don’t want to wait any longer. Their dates have already arrived. Time will tell if the proper decisions have been made.

Here, it’s almost certain that we’re going to wait a while longer. And with the waiting comes more anxiety, more questions, more uncertainty about how and when we’re going to turn the economy back on in the Bay State.

It would be easy — and also very tempting — to say, as many others have, that the cure can’t be worse than the disease, and that we need to get on with our lives and get on with the economy. But we can’t really turn the economy back on until people feel safe enough to go to a casino or a hair salon or a restaurant or even the emergency room. And right now, far too many people just don’t feel safe enough to do any of those things.

So, in that respect, these arbitrary dates don’t really have much meaning. It will be the consuming public that will ultimately decide when the economy gets turned back on, not a governor. And at the moment, we can’t exactly set a time for that.

Still, we’ve all looked at that momentarily magical date of May 4 with hope and anticipation — again like a 5-year-old during mid-December, wishing for that day to arrive and thinking time is moving much too slowly. April has been the longest month any of us can remember, and May 4 might be the date when we can start to put all this behind us.

But it seems almost certain that we’ll have a new magical date —  and the hope, and the anticipation, will begin anew.

It’s not like anything any of us have been through before, but, then again, that’s what this pandemic has been all about.

George O’Brien is the editor of BusinessWest.

Coronavirus Cover Story

Hard Lessons

Vacant Elms College Campus

‘Extraordinary.’ That’s how one area college president described the massive shift to online learning that colleges and universities nationwide were forced to undertake back in March. And he’s right. But these are extraordinary times — and beyond the questions about when students can safety return to campus, and concerns about declining enrollment and revenues going forward, are a series of equally extraordinary conversations about what higher education might look like on the other side of the COVID-19 crisis, and why.

Back in March, when colleges and universities everywhere began sending students home, the obvious question was, ‘when will they come back?’

That’s still the question — or, more accurately, one of many, many pressing questions.

Here’s another one: when students do eventually come back, how many will not? At a time when enrollment is already declining nationally, mainly due to smaller high-school graduating classes, some trade groups, like the American Council on Education, are predicting a national enrollment drop of 15% this fall, higher for international students.

“On one hand, it could be anxiety about students returning to the campus environment or students wanting to take a pause and see how things are going,” said Harry Dumay president of Elms College. “Then, their financial circumstances might make it difficult for them — although, with the stimulus funds, we are working with families to help them with those concerns.”

Dumay said Elms leaders are preparing for all contingencies when it comes to how and where summer and fall classes will be delivered, though it seems likely that at least the initial summer sessions, starting in May, will have to be remote.

“Every one of us is looking at potential loss in revenue. Obviously, if the parents lost jobs, or if students lost jobs, will they be able to afford to go back?”

“What’s less certain is what will happen in the fall. A number of factors go into making this decision, beginning, of course, with when it’s safe for our students, safe for our employees and faculty, and safe for the general public,” he noted, adding that Elms leadership constantly tracks the guidelines it receives from the Massachusetts Department of Public Health and the Centers for Disease Control and Prevention, and will not reopen the campus if doing so would provide an opportunity for the pandemic to spike, even if the curve is starting to flatten now.

Working in Elms’ favor, he noted, is the fact that it draws mainly from the Greater Springfield region, and in this current environment, graduating high-school seniors, whether in 2020 or 2021, and their families might prefer to choose a college closer to home.

“Those are discussions seniors and their parents are making around the kitchen table,” Dumay said. “We are certainly working with all of those students who have been admitted to Elms, trying to answer their questions so they can continue to pursue their dreams in a safe manner, and guide them in making those critical decisions in this critical time.”

From its perspective, Elms — and all colleges, for that matter — is making contingency plans of its own if enrollment does come in lower than the target.

“We’ll have a plan-A budget, a plan-B budget, and a plan-C budget. But Elms is on solid financial footing. We’re not wealthy — we don’t have a large endowment — but the institution is financially healthy, and we can withstand some shock in enrollment.”

Carol Leary, who is stepping down in June after 25 years as president of Bay Path University, certainly didn’t expect to spend her final weeks communicating with her staff remotely.

“Every one of us is looking at potential loss in revenue,” Leary said of … well, virtually all colleges and universities. “Obviously, if the parents lost jobs, or if students lost jobs, will they be able to afford to go back?”

With that in mind, she said, “everyone is doing their business-continuity planning and deciding what to do if there’s a decrease in enrollment for the fall. It’s on the table for most institutions, and certainly, at Bay Path, we’re talking about it. But we’re very well-placed in some ways; we usually use 4% or less of our endowment on operating costs. Obviously, when enrollment goes down, it will hit schools harder that rely more heavily on their endowment for the operating budget. I’m not sure that’s going to be an issue here.”

That said, Bay Path may freeze hiring and not fill open positions that aren’t absolutely essential, Leary said, while curtailing travel in the short term as well. “Every institution is looking at how the budget is crafted and may have to make some tough decisions — maybe even some furloughs and layoffs in the future.”

At the same time, she added, most institutions will have to start looking at themselves through a different lens — a topic she recently wrote about in an article marking 25 years in the president’s chair. Specifically, how can higher education, with its ever-spiraling costs, better reach and serve the majority of Americans, including those in lower income strata?

“I think the model and the cost are definitely areas that will change in the future, and the COVID crisis has forced all of us to look internally at how to begin to address those two issues,” she said.

With that, she raised perhaps the most intriguing question of all — how will higher education look when it emerges on the other side of the pandemic, and students do return to campus? Because most in this critical industry — and all four area presidents BusinessWest spoke with for this story — don’t believe it’s going to be status quo.

Digital Dilemma

Before considering those questions, John Cook took a moment to appreciate what a momentous challenge it has been for an entire nation’s higher-education system to go online with very little preparation.

John Cook says STCC is modeling fall enrollment

John Cook says STCC is modeling fall enrollment forecasts and developing budget options that consider all contingencies.

“It’s been extraordinary for higher education, and certainly at STCC, to make such a comprehensive change,” said Cook, president of Springfield Technical Community College. He explained that the college, like most others in Western Mass., was fortunate to be able to leverage spring break to transition to distance learning.

Christina Royal, president of Holyoke Community College (HCC), said it was a challenge to help 4,500 students, many of whom had never experienced online learning, to become familiar with all the technology, software, and scheduling. At the same time, many students were losing their jobs — for example, in restaurants and hospitality — and exacerbating issues of food and housing insecurity among lower-income students.

“That creates a lot of extra stress with students — ‘I’m losing my job and trying to figure out how to take classes online.’ We’ve had to spend a lot of time helping students through that,” she said, adding that HCC has hooked students up with Chromebooks and other equipment as needed. “I’ve done several town-hall meetings with faculty and staff, and meetings with students, to answer their questions and validate their feelings and acknowledge the uncertainty they’re feeling.”

Dumay was similarly thankful for the spring-break cushion that gave professors extra time to adapt their courses to the online environment.

“That creates a lot of extra stress with students — ‘I’m losing my job and trying to figure out how to take classes online.’ We’ve had to spend a lot of time helping students through that.”

“The faculty were amazing, and they turned it around,” he said. “The courses are being delivered in different ways — some are using live Zoom sessions, some are using asynchronous Zoom sessions, and some used narrated PowerPoint delivery that students can access on their own time.”

Elms recently reached out to all students to poll them on how classes were going, and 30% responded, Dumay said. Of those, the vast majority said they had what they needed to continue their learning online, while about 2.5% reported difficulty with Internet access. In response, Elms is keeping its library open for that reason — with social-distancing measures in place, of course.

“More than 86% feel confident being successful in the online environment; some students said this is a lot more work,” Dumay said, conceding that in-person learning is preferable in most cases, and for myriad reasons. “Elms is a lot more than being academically successful. Part of the value proposition for Elms College is its small, very intimate environment that emphasizes growth of the whole person — the spiritual component, the psychosocial component.”

Trying to replicate that online is difficult, Dumay said, but the college is doing what it can to build an online community where students can connect with each other and access the campus resources they need.

Perhaps no institution in the region was more prepared for the online transition than Bay Path, which has been offering its graduate programs almost entirely online since 2006, and its undergraduate American Women’s College is totally online as well. Leary feels like that’s a path forward to help all students afford an education.

“There will always be people who can afford institutions like Harvard and Princeton and Yale, but the majority of Americans can’t afford that type of education,” she said. “That’s why we’ve created a very low-cost model in the American Women’s College, putting together a well-crafted curriculum and a model that supports students, so very few will fall through the cracks.”

For now, she added, the percentage of classes that will continue online is up in the air.

“Most of us are thinking that summer school will be online, and then then we start looking at the fall. Even if social distancing is lifted, we don’t know what the impact on the college will be — on the residence halls, the classrooms, the dining rooms. As we look to the fall, we’ll be prepared to open, and we’ll also be prepared to go online. We have to be nimble.”

Profit and Loss

Leaders of the 15 community colleges in Massachusetts have kept in touch about when they might open campuses up, and even then, under what kind of social-distancing parameters, Royal said. As for summer programs, HCC’s first session has already been moved fully online, but because a handful of second-session classes will be more difficult to deliver remotely, that decision is in limbo — not to mention what will happen in the fall.

Christina Royal says many students are dealing

Christina Royal says many students are dealing with not just a shift to online classes, but job loss and food and housing insecurity.

“It’s hard to say definitively what the situation will be in September or October,” she told BusinessWest. “What I’m trying to do is position us so that, whatever the situation, we can pivot on very short notice, and respond even faster than we did this time around, because all the parameters are in place to do so.”

Cook said STCC is currently modeling enrollment projections and working with trustees on a budget that takes into consideration a possible enrollment hit. He noted, however, that community colleges in Massachusetts tend to do well during economic downturns.

Royal noted that trend as well. “We run counter-cyclical to the economy. When the economy starts to go down, people start thinking, ‘what do I need to retool myself, and how can I prepare for a career change?’ — and our enrollment goes up.”

She noted the trend becomes noticeable about 12 months after a recession begins, and, indeed, 2010 — the height of the Great Recession, which began in late 2008 — was HCC’s most recent enrollment peak; as the economy has improved, enrollment has steadily declined.

The question, both she and Cook said, is whether the same rules apply in the current environment, which is not a slow-building recession, but a full-stop economic shutdown that could, in turn, lead to an extended economic lull.

“When you think of recessions we’ve had in the past, we built toward them, but this is so sudden, with high numbers of people filing for unemployment,” Royal said. “It’s very unexpected, and we’re not sure how it’s going to play out.”

One wild card in the mix is what she called the “emotional recovery” from what’s happening now. “People have been jarred to their core; they’re concerned about their own safety and concerned about engaging in the world.”

That said, HCC was already planning for a 5% enrollment reduction this fall — largely due to demographic trends — but is now thinking in terms of 10%. “We have to plan for that contingency, and we have to deliver a balanced budget to the trustees. So that’s what we’re looking at.”

“When you think of recessions we’ve had in the past, we built toward them, but this is so sudden, with high numbers of people filing for unemployment. It’s very unexpected, and we’re not sure how it’s going to play out.”

If enrollment does decline by 15% nationally, that represents a $23 billion revenue loss for colleges — money that will be only partly offset by government relief funds. For example, more than 80 colleges and universities in Massachusetts will collectively receive more than $270 million as part of a federal relief package intended to help schools and students during the pandemic. UMass Amherst tops that list with an estimated $18.3 million in aid. Nationally, the Higher Education Relief Fund allocated $12.5 billion to 5,125 colleges and universities.

Collectively, the 15 community colleges in Massachusetts will receive $48.8 million in aid — certainly a help, but not enough to ease enrollment concerns going forward. Cook agreed with Royal that community colleges shouldn’t assume the sort of enrollment bump they usually see during recessions, even though they offer a more affordable model than private, residential colleges.

“This isn’t like any economic downturn the nation has ever experienced in the past, even the Great Recession,” he said. “Because of the public-health impact on people’s lives, it’s hard to assume enrollment will be up in the near future. People are dealing with so much else in their lives, they’re not able to turn their attention to education and workforce development.”

Future Shock

If there’s a positive lesson from the pandemic to bring into the future, Royal said, it’s the massive potential of technology to streamline education and make it more affordable and accessible.

“What’s happening now isn’t online learning; it’s emergency remote learning. I don’t want people to think that someone having to pivot and put together course materials with one or two weeks notice to deliver for the second half of the semester is the bar of online learning,” said Royal, who has a Ph.D. in instructional design and spent years heading up distance learning for a large community college in Ohio.

“I think of the potential for more innovative learning designs, highly interactive simulation labs augmented in virtual reality — those are more sophisticated than what we see in online courses now,” she added. “I believe the promise of online learning will be realized someday, but that’s going to require more inclusion and investment and professional development to really expose our educators to the possibilities.”

Some good can come out of every crisis, Leary said, citing in particular the rise of telemedicine, which will likely get a permanent boost from the COVID-19 crisis, as well as companies learning the value of remote work, lower emissions generating cleaner air in cities right now, and, yes, a greater focus on how to not only teach students remotely, but do it better.

Another takeaway, Royal said, might be a new focus on process improvement that extends well beyond remote learning. “If something takes six steps but we’ve learned how to do it in three, why are we going back to six? So, when we open our doors again, we’ll be looking at how we can streamline processes — and how to offer more virtual services in general.”

She’s not speaking about classes here; rather, it’s the routine business of paying bills, getting forms signed, and other administrative functions. “They might want to do that remotely, at 8 in the evening, at their computer, while they’re thinking about it. So, I see a lot of room for process improvement and streamlining student services overall.”

STCC is also learning it can offer value through streamlining its admissions, enrollment, and financial-aid operations online, “to make it more seamless for our students to work through the experience of getting into college and staying with the college,” Cook said — even while continuing to promote the face-to-face value of its campus advising center.

Meanwhile, through the online transition, “we’ve learned that we can move pretty quickly,” Cook said. “Sometimes higher education gets painted as slow to respond, slow to adapt, but we’ve demonstrated that we can move quickly and with a degree of grace when we need to.”

Dumay said lessons learned from the COVID-19 shutdown might change college life in America in ways both good and bad. On the positive side, while online learning can’t replicate the important interpersonal development built by campus life, going online has demonstrated there is a bigger place than college leaders might have imagined for remote programs.

“This will alleviate a lot of the fears people have about the efficacy of online learning. They’ll realize they can do it where it works, so we can have a lot more learning in the online environment,” he said. “But that doesn’t mean education will move completely online. The residential experience is a rite of passage for the growth of a lot of American youth. It would be a loss if we didn’t return to that at some point in the future.”

More worrisome, Dumay said, is the potential this crisis has to shut down many schools completely.

“It may be that some don’t make it and close their doors,” he said, noting that the most vulnerable colleges include many that serve lower-income, first-generation students, often students of color. “If higher education became less accessible, that would be an unfortunate casualty of this pandemic.”

Grade: Incomplete

The presidents who spoke with BusinessWest had a lot to say — much, much more than could fit in this story — but, while their comments were insightful, they were in many cases less than definitive. After all, it’s hard to speak definitively about a pandemic — and an economic shutdown — that offer no sure timeline.

“Within our student body and our employees, people are really hoping for clarity — that’s the element in short supply right now,” Cook said. “As we continue to work with these health guidelines, as we flatten the curve and pay attention to social distancing, when and how will that allow us to get back to some version of where our value lies — leveraging on-campus resources like labs and simulation?

“No one knows when we’ll get back to leveraging those resources,” he added, “but there’s still a lot of hope around that — and worry, because those are incredible resources for our students.”

In short, it’s impossible to deliver all the value a college offers over a computer screen, from miles away. In the meantime, everyone is learning valuable lessons — which is, after all, the point of higher education.

Joseph Bednar can be reached at [email protected]

Coronavirus Sections Special Coverage

Neighbors Helping Neighbors

The Amherst Area Chamber of Commerce has partnered with the Amherst Business Improvement District’s launch of the Relief and Resiliency Microgrant Program to provide financial relief to Amherst-wide small businesses affected by COVID-19 closures, through the newly formed Downtown Amherst Foundation (DAF). The foundation, a 501(c)(3) nonprofit, was formed as a means to develop downtown Amherst cultural projects, such as a permanent outdoor performance space, but has shifted its focus to support Amherst economic stability during this difficult time.

Now, the Downtown Amherst Foundation is expanding its focus to all of Amherst, with the launch of the Relief and Resiliency Microgrant Program, executed and managed in partnership with the Amherst Area Chamber of Commerce. The goal is to raise $500,000, and $80,000 has been raised so far.

The negative economic impact of COVID-19 is unprecedented. In downtown Amherst alone, more than 70% of surveyed businesses said they could not survive a shutdown through May. The Downtown Amherst Foundation’s program intends to offer microgrants to small, local businesses and individual contractors to meet their short-term financial needs. The grant can cover employee wages and benefits (including benefits associated with employment, such as health insurance), accounts payable, fixed costs, inventory, rent, and utilities. The grants are available for Amherst small businesses, independent contractors, and self-employed individuals who operate brick-and-mortar businesses.

The foundation hopes to have funds in place and be open for applications on May 1, with an initial deadline of May 10. Subsequent deadlines will be announced. Individual donations are needed and will be tax-free. Checks can be sent to the Downtown Amherst Foundation, 35 South Pleasant St., Amherst, MA 01002, and gifts can also be made online at www.downtownamherstfoundation.org.

The new focus addresses the challenges and shortfalls of the federal stimulus package as a way to manage continual fiscal costs to help Amherst businesses weather the uncertainties of the pandemic and put them on sound footing. Amherst’s economy is uniquely aligned with higher education, and the shutdown and closures of the colleges and university hit the town earlier than other communities in the state.

The grant review committee includes Irvin Rhodes, organizational development consultant; Ellen Brout Lindsay, nonprofit consultant; Tony Maroulis, executive director of External Relations & University Events, UMass Amherst; Ralph Tate, investment-management specialist and treasurer of Kestrel Land Trust; and Glenn Barrett, CEO of Ortholite. These community members say they are united in their love of Amherst and have no conflicts of interest as business owners or landlords.

The initial push will be fundraising through Patronicity, an organization that partners with state agencies, foundations, private corporations, and granting organizations to offer pools of funding, often in the form of grants, to the organization’s constituent communities. Thomas Moore of TigerWeb, a digital marketing firm, donated the program’s logo design.

E-mail Claudia Pazmany, executive director of the Amherst Area Chamber of Commerce, with any inquiries at [email protected].

Coronavirus Sections Special Coverage

The New Math

By George O’Brien

Julie Quink noted that, at her accounting firm — as well as most others — it is tradition to have a large party on April 15, the tax-filing deadline, or perhaps the 16th.

These are celebrations of hard work well done, she told BusinessWest, adding that staff members who have been under a great deal of stress and working long hours and long weeks can take a deep breath and relax, knowing that the worst is over for another year.

This April 15, there was no party at Burkhart Pizzanelli, the firm she serves as managing partner, or at most other firms. And it’s not just because the filing deadline has been extended to July 15 by both the state and federal governments.

It’s because there is still a great deal of stress, and the long hours continue as accounting firms play a huge role in trying to help their clients get to the other side of the COVID-19 pandemic.

“On a personal level, I’ve probably never worked as hard in my entire career as I have this year,” she noted. “I’ve put in many more hours than I have other years, and I know others have as well.”

Quink was one of several area accounting-firm executives to speak with BusinessWest as part of the latest in a series of virtual roundtable discussions concerning COVID-19. Those at the ‘table’ said these are, quite obviously, different times for accountants. While some of the work hasn’t changed, like all those tax returns, some of it has, including efforts to help clients of all sizes and in virtually every sector file for disaster relief (especially through the Small Business Administration’s Paycheck Protection Program), and — now that the money has started coming in — properly manage those funds so that the loans granted are forgivable.

But the work goes well beyond helping clients fill out the necessary paperwork, said Steve Erickson, CPA, partner in charge of Whittlesey’s Holyoke office. He said clients need to carefully manage cash flow, and they also need plans for the short and long term as they address life during — and after — this pandemic, and his firm, like others, has stepped in to assist with this often-difficult work.

“The biggest concern we see is cash flow and advising clients on what’s coming down the pike and making good long-term plans for whatever they’re doing,” he told BusinessWest. “And each one of them is unique; I can’t say that there’s one that’s very similar to the other.”

Meanwhile, the manner in which work is being done is obviously changing as well. Many of those we spoke with are working at home — some or all of the time — while discussions with clients and co-workers are now done mostly by phone, e-mail, or Zoom. And since accountants are working with clients’ sensitive financial information while at home, proper protocols and security measures have been added.

There are lessons being learned. Summing up the comments offered, it seems that those in accounting work much more efficiently — and certainly communicate much better — when they’re together in the same office, sharing ideas and collaborating. As for clients … the remote meetings have worked well, for the most part, and they may be the preferred method moving forward.

“From a positive standpoint, this has shined a bit of a light on our firm as far as our processes, our policies, how we can do things better, and what we should be looking to do better, said Patrick Leary, CPA, a partner with Springfield-based MP CPAs. “Hopefully, we’re going to learn from this and everyone else will learn from this and make themselves a stronger firm.”

Overall, this has been, and will continue to be, an intriguing, challenging, and in most all ways rewarding time for accountants, said those at the virtual table. Clients are calling them — and leaning on them for help — like never before, and as a result, relationships are being strengthened, and new ones are being formed.

Jim Barrett, managing partner at Holyoke-based Meyers Brothers Kalicka, said that, for some time, his firm — and most all firms, for that matter — have been working to broaden the umbrella of services to clients and develop relationships that are more advisory and consultative in nature.

The pandemic has in some ways forced the issue.

“This crisis has spurred us to do more consultative and advisory work with clients, not only with navigating the stimulus package, but also navigating any changes in their business, be it with employees or costs,” Barrett explained, adding that this work is certainly ongoing and is likely to continue for some time.

Beyond the Numbers

All through her career, Quink told BusinessWest, she’s prided herself on having the answers when clients have questions.

She still has most of the answers, but COVID-19 has changed that equation as well, because now, the questions are, well, different — in many cases, much different.

“This is my 29th year doing this, and I can’t recall a time when I’ve said ‘I don’t know the answer to that’ as much as I have these past few months, and follow it up with ‘I’ll have to get back to you,’”  she told BusinessWest, adding that, in many cases, the answers don’t come easily.

That’s because clients are asking about whether to furlough employees or lay them off; or about whether employees can be ordered back to work; or about how to handle a situation where a laid-off employee is making far more on unemployment than they would on the job — and, therefore, wants to stay laid off; or about what to do with employees who must stay on the payroll for the loan from the SBA to be forgivable, but have no work to do because the business can’t open yet because it’s not deemed ‘essential.’

“People who scrambled to apply for the loan as soon as they could for fear that the funds were going to run out are now starting to receive those proceeds, and they’re asking, ‘if I bring my employees back, what am I going to do with them?’” said Leary, noting that there are many types of businesses that fall into this category. “Do they paint the walls?

“If you’re a lower-wage earner, and you can make the same or more on employment, what’s the incentive to go back to work and help my employer have some of his loans forgiven?” he went on. “It’s a predicament that a lot of companies are facing, and we haven’t seen any real guidance on it.”

Coping with such questions is a new reality for accountants. Actually, it’s one of many new realities. And they all come on top of the oldest of realties — tax season.

Add it all up — pun intended — and this has been a very different start to the year for accountants. Things began as they generally do, with tax-return work starting to flow in during the winter months and building toward the annual late-March, early April crush. By mid-March, though, as the pandemic reached Western Mass., and especially after non-essential businesses were ordered closed on March 24, things changed dramatically.

Clients were suddenly thrust into a situation unlike anything they’d seen before, said Barrett, and they were calling their accountant in search of some answers and, more importantly, some guidance.

“There’s a lot of companies and medical practices who have never gone through this before, and they’re doing the appropriate thing … their financial people are going through their expenses, they’re going through what needs to be paid and what should be paid — basic business decisions that they’re trying to make under a period of duress,” said Barrett. “What we see is that either the company doesn’t have a financial person — it’s the owner asking us — or they do have a financial person, and that person is, for the most part, by themselves, and they’re looking for advice or just want to bounce their plan off someone to see that it makes sense.”

And as clients started calling with new and different needs, accountants were having to adjust to new ways to work.

Indeed, most have been working at home — another of those new realities that brings its own set of challenges — and thus communicating with clients and colleagues alike in ways other than face-to-face.

“We’ve instituted procedures and policies that we never had before because we’ve never had that many people working out of the office,” said Barrett, whose sentiments were echoed by others at the ‘table.’ “We’re still fine-tuning those moving forward, but it’s changing the way we work, without a doubt.”

Erickson agreed. He said Whittlesey closed its three offices on March 18 and went to remote access. Like everyone else who’s gone through it, he called it a learning experience.

“It was a little bumpy at first, just getting used to the whole thing and trying to stay out of the kitchen and all the snacks in there,” he noted. “But, overall, it’s gone smoothly.”

Quink noted that, while Burkhart Pizzanelli has closed its office to outside traffic, some staffers still come to the office most days, and carefully practice social distancing — while taking a number of other steps in the name of safety — while doing so.

“We’re not on top of each other; we have a nice layout so we can maintain the appropriate distance,” she explained. “At lunchtime, it might look like you’re looking at the royal family — there’s one on one end of the table and one at the other end, and we’re always going around and reminding each other about being safe and taking the steps to stay safe; we emphasize that, if one of us goes down, the entire firm is down.”

Forms and Function

But it’s the nature of the work, more than how it’s carried out, that has been the more dramatic, and impactful, change for accountants.

Much of it has involved filing for PPP relief and now helping clients carefully manage that money, but, as noted earlier, it goes well beyond that.

There are all those questions to answer, or try to answer, as the case may be, but there’s also the task of helping companies plan — something that’s very difficult to do in these times — for whatever might happen in the coming months.

“We have spent quite a bit of time with our corporate clients talking about cash-flow management and cash-flow projections,” said Leary. “We’re talking through ‘what-if’ scenarios with a range of clients that runs the gamut, from those in the cleaning-supply business who cannot get enough product in the door to those in the hospitality industry who have shuttered their doors.

“We’ve had some discussions with some distributors and manufacturers who are now being more cognizant of their suppliers and their inventory levels,” he went on, offering a specific example of the consultative work going on. “They’re looking at having redundant suppliers; instead of having just a West Coast supplier, they’re asking whether they should also have one from Canada or one in the Asia market. If borders get closed, do they have a redundant supplier, and what is the proper inventory level? There’s a lot of thoughtful planning going on.”

Erickson concurred, and noted that, while planning, clients of all sizes are grappling with the moment as well, and this means dealing with everything from cash flow to employment matters to discussions with the landlord and the bank about possible deferrals of payments.

Quink agreed and noted that, overall, there are important conversations to be had with clients. And while some of them, especially those with the cleaning companies that have more work than they can handle, are upbeat in nature, most are exactly the opposite.

“We’re having a lot of strategy conversations with clients, and the reality is that some of the clients we’re taking to … we know they’re not going to make it through this,” she said. “So we’re having the best conversations we can to position them so that when that happens — if it happens — they’re at least well-advised.”

While it’s difficult to see any silver linings to the current crisis situation, the accountants at the ‘table’ said they can find some in the way that clients are looking to learn from what’s happened and take steps to not only survive the pandemic but be a better, stronger company for the future.

“There are a lot of people proactively planning for the long term,” Leary said. “And to me, that’s positive; they’re not making impulsive decisions and thinking that this is going to close their doors permanently. It’s more, ‘when we come out of this, how do we do it better?’ And that’s encouraging.”

As for the accounting firms themselves, they’re dealing with the moment themselves, and it’s a challenging time. Most of the consulting work mentioned above is provided at the upper levels, by the partners, who, at the same time, are trying to manage younger staff members, many of them working remotely.

“We’re trying to juggle two things at once, and we’re frustrated that we can’t teach as much, and it’s difficult to manage younger people at home,” Barrett said. “Meanwhile, there’s that thought in the back of our minds … ‘boy, I hope we get paid for this.’”

Indeed, while firms are eager to help, they are advising clients knowing that the bills for their services may wind up at or near the bottom of the pile of those that get paid. Such fears are the basis for comments shared by many at the table that, while this will be a busy year, it may not be a good one when it comes to the bottom line.

This is just one of many stress-inducing matters to contend with during a year that will be unlike any other for the accounting firms in the region.

“The toll that this pandemic has taken on our team from the mental perspective is enormous,” said Quink. “It not just how it’s extended the season, but how it’s added a lot to our workloads.”

Bottom Line

Getting back to the annual April 15 celebration … Quink told BusinessWest there might be a party on July 15, when tax returns are now due. But maybe not.

Tax season will be over, but the work of helping clients navigate their way through COVID-19-generated whitewater will be ongoing.

That’s part of the new reality for accountants, and it will become the status quo for the foreseeable future. It will be a challenging time in many different respects, and one that gives new meaning to the phrase ‘taxing situation.’ 

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

Coronavirus Sections Special Coverage

‘Eds and meds.’

That’s the phrase people use when talking about the backbone of this region’s economy. That’s short for education and medicine, and those two sectors really are the pillars when it comes to the economy in Western Mass.

There are others, to be sure — precision manufacturing, tourism and hospitality, financial services, and a huge population of nonprofit agencies. But eds and meds … those are the two areas that seemingly hold everything else up, from the service sector to the broad construction industry; from food and beverage to hospitality.

And now, these pillars of the economy are being seriously impacted by the COVID-19 pandemic. There will certainly be a trickle-down effect that will touch every sector of the economy, and it will be significant, but for these two sectors themselves, the pandemic brings them the sternest test they’ve ever faced.

Let’s start with healthcare. And the place to start there is there, with the hospitals that dominate that sector. Unable to perform elective surgeries and facing a host of new expenses because of the pandemic, these institutions, which employ tens of thousands of people between them, are facing serious cash-flow challenges.

Yes, these hospitals will receive some disaster relief from state and federal governments, and eventually, they will be able to return to something approaching normal — as in what was happening just six weeks ago — but hospitals are suffering fiscal wounds that will not heal quickly or easily.

As for the other many facets of the healthcare sector, many practices are closed or operating at far less than full capacity as the pandemic has many people reluctant to leave their homes for treatment that simply cannot be administered from six feet away.

Like businesses in other sectors, healthcare practices can apply for disaster relief, and some are receiving it, but almost every business in this sector is being negatively impacted, and some are simply in survival mode. The day will come when people will want to go back to the dentist, the optometrist, and the podiatrist, but one can only schedule so many appointments in a day.

Like other businesses, these practices are losing money they really can’t recover.

Overall, though, the ‘meds’ sector is strong, and it will eventually bounce back. And while the same is likely true for the ‘eds’ side of the equation, these are perilous times for this sector as well.

Indeed, the region’s colleges and universities are, for the most part, ghost towns at the moment. Campuses are essentially shut down, and learning is being carried out remotely. Schools that already seeing their endowments take big hits are facing huge losses as they reimburse students for room and board for this semester. And now serious question marks loom about the fall semester.

Behind closed doors, many college administrators are conceding that students may not be able to return in September, and they may not be able to come back until next spring. Meanwhile, many graduating high-school students, not to mention their parents, are wondering whether a crowded a college campus is the place to be — this fall, next spring, or in general.

This is the time of year when those seniors commit to colleges, with May 1 being a traditional deadline of sorts. Now, that deadline is being pushed back at most institutions in the hope that time will sharpen what it is, at the moment, a very fuzzy picture.

It is almost certain that, between the pandemic and the fiscal hardships it is causing to individuals and families, enrollment will be down, at a time when high-school graduating classes have been getting smaller and many colleges were already facing enrollment challenges.

Like the ‘meds’ sector, the ‘eds’ sector is strong and resilient. Many of the institutions have been around for 150 years or more, and they will survive this. But they likely won’t be the same.

And neither will the region, because these are the pillars of the Western Mass. economy, and they hold up everything else.