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The Case Against Required Paid Sick Leave

For several years, the idea of mandating every business to offer paid sick leave to their employees has been debated in the Statehouse. The Affiliated Chambers of Commerce of Greater Springfield (ACCGS) has opposed the resulting legislation.

Does opposition to mandated-leave legislation make the ACCGS and its members mean people? Quite the opposite. We simply believe that mandated paid sick leave is an intrusion by government into the relationship employers have with their employees. We believe it is not only wrong but could be counterproductive.

The ACCGS represents roughly 800 businesses, and the vast majority of those businesses offer paid sick leave as part of their overall benefits package. Every member of the ACCGS realizes that their employees are their most vital assets. Whether on the front line of service or in the back rooms for support, the employees of our members are valued by their employers. As such, benefit packages are always under review, either because of employee requests for certain benefits, or because of the escalating costs associated with some benefits. There is a delicate balance for employers when developing benefits packages, but this balance should be settled between employees and employers, not the government.

How does government know the bottom line of a business? How does government know what gives one business in our area a competitive advantage over another business perhaps in a neighboring state? Government-mandated paid sick leave would take the flexibility out of the design of benefit packages intended to suit the distinct needs of a business and its employees. Many companies have best practices that allow their employees leave when ill with no adverse consequences, while providing that business with the flexibility it needs to continue to successfully operate, seen especially in the service sector when maintaining a full staff is crucial.

Many businesses in our region, and around the country, are finding creative ways of providing all types of days off: vacation, sick, personal, or ‘paid time off’ which can be used as best fits the employee’s situation. A state-mandated effort to disrupt those types of agreements would be a move in the wrong direction.

Legislated paid sick leave has once again surfaced, and the ACCGS will once again oppose this effort. While we continue to believe that government intrusion into this issue is simply wrong, we contend that it could also impact continued economic recovery. Our region’s economy is recovering, but our members still express uncertainty over the future as they watch the activities in Washington. State-mandated paid sick leave adds to this uncertainty. It causes businesses to hesitate on increased hiring and to spend more of their focus on developing plans to survive these mandates rather than on working to thrive in this economy. Our legislators have enacted some successful legislation to assist our economic recovery, including the passage of the jobs bill last year and changes to small-business regulations; however, this specific piece of legislation could counteract much of those efforts.

With the strong relationships our members have with their employees, the ACCGS believes the dialogue over paid sick leave should be left to the employer and employee so as to ensure flexibility and promote activity and creativity when developing benefits packages. Let these parties determine what the right benefits are for their individual business models and the specific needs of their employee population rather than through legislation written with no real understanding of the existing relationships between employee and employer.

 

Jeffrey S. Ciuffreda is president of the Affiliated Chambers of Commerce of Greater Springfield.

Editorial

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Opinion
The Casino Dilemma for Springfield

It’s certainly not surprising that Springfield Mayor Domenic Sarno has decided to negotiate a final host-community agreement with both MGM and Penn National Gaming, the two companies vying to place a casino in Springfield (see related stories, pages 17 and 23).

After all, there are still many details to be hammered out on both proposals, and, as we’ve said on several occasions, it behooves the city to keep this competition going as long as it possibly can. Doing so will create better proposals and inevitably create more benefits for the city, its business community, and area nonprofits.

So while this particular decision was a no-brainer in most respects, the next one is exponentially more difficult. It comes down to whether one or both proposals will go before the voters in the city and, eventually, to the Mass. Gaming Commission. (While it’s possible that neither proposal will advance beyond this point, we consider that highly unlikely given the many identified benefits to having a casino in the city.)

This is a difficult decision because there are many factors that go into it, but two real considerations. The first is that Springfield officials, and especially Mayor Domenic Sarno, do not necessarily want the city’s voters or the Gaming Commission deciding where a Springfield casino is going to go — they want to make that decision themselves based on a number of factors, but essentially their objective and subjective determination of which project works best for the city. Once matters go the Gaming Commission, the city has no control.

The second major consideration is that the city is in the contest for a Western Mass. casino license for one reason — to win it. And there are questions about whether Springfield will stand a better chance of doing that if it has one proposal being considered by the Gaming Commission or two.

Indeed, while a simple mathematical analysis would conclude that, if the city has two of the four casino proposals under consideration (the others being in Palmer and West Springfield), it has a 50% chance of winning the license, and only a 33% chance if it has only one proposal, that may not be the case. Gaming Commission members may become split on the Springfield proposals (as many in the city already are), thus theoretically allowing a rival plan to slip in with a majority of the votes.

So what is Springfield to do? Sending both proposals to the voters and then the Gaming Commission would be fair, and would certainly leave fewer questions about whether politics might be involved. But is there room for ‘fair’ in this ultra-high-stakes competition?

It is probably still too early in the process to even determine if both plans are worthy of going before the commission (although the Boston Globe has already endorsed MGM’s plan as the best for Springfield from an economic-development standpoint), but we would advise the city to let the voters and the Gaming Commission have a say on both plans.

Yes, the city stands a chance of looking divided, or not unified on one plan, but that is, in fact, the reality of the moment. This city is not unified on one plan, and it’s not going to become unified — there is simply too much at stake for the supporters of both proposals for that to happen.

And if the city isn’t going to become unified, it shouldn’t make any pretension that it is, even when the purpose for doing so would be to better its odds of winning the $800 million lottery.

For the next several months, there will be a heated debate about whether Springfield is better off with one casino proposal or two. There is no quick or easy answer to that question, but how it’s answered will be a critical matter for this city moving forward.

And it must be answered correctly.

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Opinion
Developing a Skilled Workforce

Gov. Deval Patrick recently disclosed plans to include $112 million in the state budget for the MASSGrant college-scholarship program. It was no surprise he chose to make the announcement during a visit with students at Springfield Technical Community College’s Smith & Wesson Technology Applications Center. The center teaches precision machining and other skills needed in modern manufacturing.

The governor has strongly stated his intention to support the state’s fifth-largest employment sector, manufacturing. As states struggle with limited budgets, he recognizes manufacturing education as an investment in long-term growth. And that is why the Society of Manufacturing Engineers (SME) is especially pleased to return to West Springfield this May for EASTEC, the largest manufacturing event in the Northeast.

Manufacturing education is in crisis. While the national unemployment rate remains near 8% (Massachusetts was at 6.7% in December), as many as 600,000 manufacturing jobs have gone unfilled because of a shortage of skilled workers. The question for state government executives is how to replace retiring skilled workers with the next generation of workers who can operate and maintain sophisticated machinery designed to speed production times and cut costs.

Massachusetts is already taking many of the actions SME outlines in its Workforce Imperative: A Manufacturing Education Strategy, including:

• Partnering with business. The state’s Advanced Manufacturing Collaborative is an excellent example of how business, government, and educators can identify the skills that are needed, understand and update the curriculum, and engage students in real-world projects through design-build competitions and internships.

• Access to education. The governor signed into law last year reforms of the state’s community-college system. The goal is to make community colleges “more responsive to the needs of businesses and help fill the skills gap that can often leave employers with a shortage of well-trained job prospects.” We hope the reform will also include national accreditation for schools and skills certification for students.

• Supporting STEM. The SME education strategy calls for building a strong foundation for science, technology, engineering, and mathematics. Earlier this year, Lt. Gov. Timothy Murray announced the expansion of five programs across the state to prepare workers for careers in STEM fields. In addition to approximately $428,000 from the state’s STEM Pipeline Fund, the programs will leverage more than $1.3 million in matching funds from participating corporations, private foundations, and federal government sources.

A major challenge is to dispel the antiquated stereotypes students may have about manufacturing and STEM programs. A major focus of EASTEC will be a new “Dream It Do It” manufacturing student challenge. It gives students and educators the opportunity to see and experience the ‘wow’ factor in modern manufacturing — new, cutting-edge technologies that are transforming how we make things.

Massachusetts is leading the way on building a workforce prepared to tackle the challenges ahead of us. We hope other states will follow.

 

Mark C. Tomlinson, CMfgE, EMCP, is executive director and CEO of the Society of Manufacturing Engineers (SME). SME, the organizer of EASTEC, is a leader in workforce-development issues in manufacturing, working with industry, academic, and government partners to support the current and future skilled workforce.

Editorial

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Opinion
The Power of Passion Makes a Difference

When State Trooper Michael Cutone talks about the so-called C3P, or Counter Criminal Continuum Policing Program, now being implemented in Springfield’s Brightwood neighborhood, there is an unmistakable passion in his voice.

And it’s understandable.

Cutone, fellow State Trooper Tom Sarrouf, and John Barbieri, deputy chief of police in Springfield, are the three main architects of this program, which has enjoyed considerable success with the daunting task of taking neighborhood residents, once relegated to the role of spectators by fear and apathy, and making them a major force in a counter-insurgency effort that has gang members reportedly throwing their cell phones in the Connecticut River because they believe they’re bugged by police.

“Gang members and drug dealers are very savvy — they exploit the fact that people don’t want to engage with the police; they exploit that passive support,” Cutone told BusinessWest, adding that, while the program has a long way to go, it is succeeding with its broad goal of turning that base of support on its ear. And it is because of his passion for the program and its tactics — borrowed from work Cutone and Sarrouf employed with the Green Berets in Iraq — that it is enjoying solid results and bringing news media from across the country to see how it works.

This passion might be considered the prevailing common denominator among this year’s class of Difference Makers.

Indeed, there is passion in Bruce Landon’s voice when he talks about not only how, but why he has fought so hard to keep professional hockey in Springfield, assembling three different ownership groups. That same emotion is there as Sisters Kathleen Popko and Mary Caritas talk about the Sisters of Providence and their incredibly inspiring 140-year track record of finding new and much-needed ways to assist underserved segments of the population.

The passion is palpable as the remarkable John Downing talks about Soldier On and how it never stops working to find ways to improve the lives of those who have served their country. And it bubbles over when Jim Vinick talks about the Jimmy Fund, the Naismith Memorial Basketball Hall of Fame, and the myriad other causes and institutions he has attached his name to.

Thus, we may well attach the subtitle ‘the power of passion’ to this year’s stories, because it certainly sums things up. There are, indeed, many ways to effectively make a difference in a community, but the process of doing so begins with the requisite passion for a cause or a problem. And there is a lesson there for all of us — find something, or some things, we’re passionate about, and then use that emotion to change people’s lives.

Landon is often called ‘Mr. Hockey’ in Springfield, a fitting title for someone who played the game here and has held about every title in the front office. But there’s a big difference between liking a sport and devoting your life to keeping a team playing in downtown Springfield. The difference is the level of passion.

The same can be said of Vinick. Many people sit on multiple boards and donate time and money to causes. Vinick goes beyond, giving himself to those causes. That means he gives his love of his hometown and the game with which it is identified, and he gives his desire, born from great personal tragedy, to help all those who have seen their lives turned upside down by cancer.

Downing has a simple passion for helping any individual who would go fight and die for his or her country, and this is seen clearly in a career-long quest to help those who discovered that their fight wasn’t over when they returned home from service. And the Sisters of Providence have made a passion for caring service the trait that defines the congregation.

The stories of this year’s Difference Makers vary in some ways, but they all convey the same message: there really is no limit to what you can accomplish when you’re passionate about something, and when you find ways to channel that passion into solutions for others.

Opinion

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Opinion
Mentoring Positively Impacts Two Lives

The beginning of the year is a time when people make resolutions and think about things they want to improve in their lives. From exercising more to eating healthier to making a career change, people use the new year to make a personal goal or commitment to they want to achieve.

The new year is also when we celebrate National Mentoring Month and raise awareness about mentoring and its impact in our communities. January is a time to highlight the importance of mentoring for young people while also putting a spotlight on the need for more caring adults to step up and become mentors. At a time when people are assessing their lives and identifying ways to improve them, mentoring a young person is a valuable option for impacting the community and oneself.

This year’s National Mentoring Month theme is ‘mentoring works.’ Research shows that the presence of a caring adult in the life of a young person helps prepare them for school, set them on a career track, and develop important life skills. All of these things also help to prevent many of the challenges that young people can experience, such as violence, substance abuse, and bullying. Spending consistent, quality time with a young person makes a big difference in their life, as it helps to give them guidance, support, and a caring role model to look up to.

What people might not realize is that mentoring actually impacts two lives. The impact for the young person is well-known, but the difference that mentoring makes for the mentor is an unknown benefit to most. The experience of spending time with a young person, listening to them, and building a friendship with them makes a huge impact on an adult and enables them to both learn and be a part of new things while sharing their skills and life experiences. Mentoring works by impacting both the mentee and the mentor, and when you stop to think about it, most of us have benefited by someone who mentored us along the way.

As the CEO of Mass Mentoring Partnership, with more than 15 years of management experience in nonprofits in Boston, I personally know the impact that mentors and caring adults have made in my own life. Growing up in a single-parent household with a mom who often worked two or three jobs just to support our family, mentoring was vital to my future path. As part of the first generation in my family to go to college and achieve things that others in my family never had the opportunity to experience, I remember those mentors who helped give me confidence and guided me down the right path. It was those caring adults that helped prepare me to go to college and think about the skills and lessons I needed to learn to get a job and plan for my future career.

They helped me figure out my path and plant the seed that my interest in giving back to others could turn into a nonprofit career. Their support and guidance enabled me to figure out what my interests were, what my goals could be, and what I could become.

My personal experience and life story proves to me that mentoring works. Professionally, there is so much we can do to help bring more caring adults into the lives of young people and give them that same chance at a brighter future. Using National Mentoring Month to highlight this issue is a great time for all of us to think about what we can do to impact young people and support this important prevention strategy in our communities.

As we march into this new year and reflect on those things we want to improve in our lives and changes we want to make, think about getting involved as a mentor and spending quality time with a young person. Not only can it impact and improve our communities, but it can make a big difference in your own life. Let’s resolve to invest our time, our energy, and our resources to close the mentoring gap and ensure that every young person who needs a caring adult in their life has one.

Marty Martinez is president and CEO of the Mass Mentoring Partnership.

Editorial

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Opinion
Gaming Panel Got Competition It Wanted

When Stephen Crosby, the chairman of the Mass. Gaming Commission, sat down for an interview with BusinessWest nearly a year ago in the restaurant at the Newton Marriott, he spoke at length about the process that would soon commence to identify casino operators who would be granted the coveted licenses to do business in the Bay State.

He used words like ‘public,’ ‘transparent,’ and ‘optimize’ to describe both this process and the goals for it. But the term he came back to repeatedly was ‘competition.’ Paraphrasing the so-called casino czar, he said the Gaming Commission didn’t want to merely award licenses, it wanted to create intense competition for them.

A year later, that goal has been accomplished, even though at times it didn’t look that way, especially in the eastern part of the state.

Indeed, by Jan. 15, the deadline to file extensive financial documents and pay a non-refundable $400,000 fee, there were 11 players in the mix, including four in the Western Mass. region, and two who have undetermined locations and could conceivably intensify the battle already taking shape within the 413 area code. Chicopee Mayor Michael Bissonnette has a site at the Cabotville Industrial Park, for example, that could come into play.

What people will soon realize, if they haven’t already, is that, when it comes to the fight for a casino license, competition is a very, very good thing. Look at the battle taking shape in Springfield as just one example.

Already, MGM Resorts and Penn National Gaming Inc. (in partnership with Peter Picknelly) seem to be trying to outdo each other when it comes to who can do the most for Union Station, one of the economic-development priorities identified by city officials. MGM says it will lease 44,000 square feet in the long-dormant station for a training institute that includes a hiring center, training rooms, and a regional call center — and it is taking out full-page ads in the local paper to announce these intentions. Penn National, meanwhile, says it will be catalyst for new development in the station by leasing office, retail, and garage space, and linking the station to the casino complex with a skywalk. These plans can now be seen on the sides of Peter Pan buses.

But it goes much deeper than Union Station. The dueling casino operators are announcing their presence, and their intentions, with philanthropic initiatives that indicate that 2013 should be a great year for organizations ranging from the Spirit of Springfield to Square One to the Dunbar Community Center.

And now, the competition is truly regional. In addition to the two Springfield proposals, there is the Mohegan Tribal Gaming Authority’s plans for Palmer, and Hard Rock International’s recently released plans for a casino complex at the Big E. As a result, the Springfield proposals not only have to compete against each other, but also against the other area players.

This should prove very beneficial for the Western Mass. area as a whole because it should — that’s should — result in a casino project that takes a more regional approach, and becomes much more than a contest to see who can take the most square footage in Union Station or write the most checks to area nonprofits. The casino will be located in one city or town, but it will impact a number of communities, to one extent or another, and the final plans should reflect this.

People in business all say they love competition (although most would probably admit privately that it is more of a love/hate relationship) because it makes them try harder, never allows them to rest easily, and drives them to continually raise the bar.

As the battle for the coveted Western Mass. casino license reaches its next critical stage, this region will find out why Crosby placed such heavy emphasis on competition. It’s because, when it exists, there are far more winners than those who are granted the casino licenses.

Opinion

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Opinion
Banks Dodge Accountability for Collapse

 

Ruining the economy means never having to say you’re sorry. And it means never having to take ownership of, or even acknowledge, the desolation that has washed over the country over the last five years.

Most of the instigators of the 2008 financial collapse (the ones that survived the crash intact) have long since moved on. They were greatly aided by a government policy that extracted cash, but not admissions of guilt, as the price of walking away from the collapse. As a recent filing in a Manhattan courtroom shows, that policy continues to leave victims of the financial meltdown in the lurch years after the crisis itself.

The prominent hedge-fund manager John Paulson approached Goldman Sachs in late 2006, when the subprime-mortgage market was sputtering toward its inevitable end. Banks were acquiring, and reselling, flawed mortgages at a furious pace. Paulson told Goldman he wanted to bet against some of the worst mortgages the banks were pushing onto the market. The result was a mortgage instrument named Abacus 2007-AC1.

Goldman’s Abacus deal was like a rancid, $2 billion subprime sausage. The bank took risky slices of 90 subprime-mortgage bonds, stuffed them together, and sold the new mortgage instrument to investors. Normally, investors in deals like Goldman’s Abacus made money when their mortgages performed. Paulson laid a relatively modest bit of money on the other end of the deal, betting that the mortgages would fail; when they did, he’d make a killing.

Deals like Goldman’s Abacus were the worst stuff the financial crisis produced, since they concentrated the riskiest, lowest-rated bits of dozens of disparate mortgage bonds into a single instrument. That’s what Paulson’s fund was looking for: a loser of a deal to bet against. Paulson’s fund selected shaky mortgages to stuff into Abacus, then had Goldman sell the instrument to other clients.

The Abacus deal blew up months after it closed, netting Paulson’s firm a quick $1 billion. A Senate subcommittee investigating the financial crisis would later label Paulson’s role in crafting Abacus a massive conflict of interest; an executive at a rival investment bank compared it to a gambler betting against a football team after asking the team’s coach to bench his quarterback. The Securities and Exchange Commission sued Goldman in 2010 for allowing Paulson’s fund to craft the deal for itself, and extracted a $550 million settlement.

Goldman never admitted any wrongdoing connected to Abacus. That’s normal. Federal regulators’ most vigorous response to the 2008 financial collapse was to buttonhole financial firms into paying a civil fine, without ever making the firms admit that the fines represented punishment for grave misdeeds. Companies paid to make cases go away and never had to admit guilt. This arrangement enabled the SEC to issue press releases trumpeting multi-million-dollar fines against unpopular banks and mortgage companies, while shielding the companies from far greater liabilities that would follow the firms’ admission of securities fraud. So while Goldman conceded it made mistakes in not describing Paulson’s true Abacus role, the bank didn’t have to cop to any wrongdoing. For the ridiculously profitable bank, it’s as if the whole affair never happened.

Although Goldman didn’t get hit with a foul over Abacus, it certainly caused harm. Investors lost billions. A financial insurer called ACA Financial, which backed the safest half of Abacus and lost millions in the deal, sued Goldman over Abacus two years ago. ACA claims Goldman lied, telling the insurer Paulson was betting with the mortgage instrument, not against it. The insurer has been chasing Goldman for $120 million, and for two years, Goldman has been hiding behind the fine print in its SEC settlement.

The government’s Abacus settlement said that, while the SEC was happy to take the bank’s money, it wasn’t making it admit to doing anything wrong. That’s been enough to let Goldman dodge wider accountability from the customers, like ACA, that it put on the wrong side of a deal built to fail. Out of frustration, ACA’s lawyers moved last week to draw Paulson’s hedge fund into their suit against Goldman. But that effort is really just a leverage play to try to break Goldman — a firm that has danced away from Abacus thus far, because its federal regulator let it dodge accountability and contrition.

Paul M. McMorrow is an associate editor at CommonWealth Magazine.

Editorial

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Opinion
A Chance for UMass to Make Connections

UMass Amherst will celebrate a major milestone this year, its 150th anniversary as a land-grant institution and the start of its role as the state university (see story, page 32).

It’s a chance to mark the school’s long history and effectively tell the story of how it has grown, matured, and become a national leader in many academic realms and a rising power in the research world. And that’s a story that definitely needs to be told, because far too many state residents, alums, state and regional economic-development leaders, and, yes, UMass trustees don’t know it as well as they should.

The 150th anniversary will provide an excellent opportunity to educate people on all that has happened in Amherst, and about the promise of much more to come.

But there is perhaps a much bigger, more important goal for the university as celebrates its beginnings at the height of the Civil War.

This would be the opportunity to re-connect with the alumni base and create more passion for the state university and its critical role in this state.

Indeed, for reasons that are somewhat difficult to articulate, there is a definite lack of passion when it comes to the university and its huge alumni base, at least when compared to the strong bond that graduates of institutions like Holy Cross, Boston College, Harvard, Amherst, Williams, and others have for their schools. And this level of passion also pales beside the fervor that graduates of other state universities across the country have for their schools.

Perhaps one of the reasons is sports — UMass does not have the high-profile programs of a Michigan, Ohio State, Florida, or Alabama. But, then again, Holy Cross and Amherst don’t have big-time sports, either. Perhaps it’s the fact that UMass must operate in the same small state as literally dozens of prestigious private institutions, including four within just a few miles of the campus. Perhaps it’s because UMass is the school that some people attend because they can’t attend those others.

Whatever the reason, the lack of a passionate alumni base has no doubt impacted the university, and not just in terms of the ridiculously low turnout for football games last fall at Gillette Stadium after the school made the risky and expensive leap to the Mid-America Conference and the so-called Football Bowl Subdivision — although that’s part of it.

This dispassion also affects donations to the school, thus limiting its overall growth opportunities, while it may also play a the role in the fact that UMass, like other public schools in the Commonwealth, has long been underfunded in comparison to institutions in other states.

A 150th-birthday celebration, even one on the huge scale that organizers are planning, is not going to change this equation overnight. But it can start to move the needle more in the desired direction.

If the university can succeed in drawing area alumni to the wide range of events on the Amherst campus, where they’ll see the cranes in the air and talk to current students, and if it’s able to attract alums from the eastern part of the state to events to be staged in Boston in October, then perhaps some important connections and reconnections can be made.

One of the sesquicentennial organizers used the phrase ‘light a fire’ to describe what he hopes might happen with the alumni base attending the various events to be staged. That’s being quite optimistic.

But it seems very realistic that the school can use this event to educate, inspire, and perhaps prompt alumni to scour their closets in search of maroon clothing. If it can do that, then maybe the passion level can start to rise.

Editorial

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Opinion
Some Other Things to Watch for in 2013

The Western Mass. casino license now up for grabs is not the proverbial elephant in the room.

Rather, it’s a herd of elephants in a very small room.

As we’ve said on more than a few occasions, this will be the largest development project in this region’s history — roughly three times the size, cost-wise, of Baystate Health’s massive ‘Hospital of the Future’ project, and perhaps four or five times the size of any new project over the past few decades in terms of new jobs.

So the heated competition to secure that coveted license will certainly be the story of 2013. But it won’t be the only one. Here are a few others that may compete for headlines as the year progresses.

 

Holyoke

Mayor Alex Morse has become the subject of discussion, conjecture, and more than a few jokes since he reversed field on casinos in late November, and then reversed it again a few weeks later. It now seems certain that Holyoke will continue to go about economic development the way the young mayor said it should — by cultivating and attracting small businesses, creating vibrancy in the downtown, promoting innovation, and, overall, convincing people who 10, 20, or 30 years ago wouldn’t have considered Holyoke a place to live or start a business, to look at it in a new light.

Several weeks ago, BusinessWest related the stories of several business owners who had either found or rediscovered the city and made it their company mailing address, and in some cases, their residential address as well. With the casino issue now apparently in the city’s rearview mirror, it will be interesting to see if Morse and his administration can continue to build momentum and generate vibrancy the old-fashioned way, meaning without 3,000 slot machines and a 300-room hotel.

 

The High Performance Computing Center

This is part of the Holyoke equation, and a big part, but also a slightly different story. Since the plans for the computing center were put on the table, city officials and area economic-development leaders have worn out the word ‘leverage’ when talking about the center, which changes the landscape in the center of Holyoke, but only brings a few dozen full-time jobs.

Just how Holyoke and the region as a whole goes about this leveraging process will be one of the stories that will start to unfold in 2013.

 

Ludlow Mills

As the story on page 36 relates, this is a very visible, potential-laden project that bears watching. This is the largest brownfield mill redevelopment project in New England, and it has enormous potential to bring jobs and vibrancy to the region. Already there is some momentum at the site — two projects have been announced, including a new, $27 million HealthSouth rehabilitation hospital, and the project was recently included in the third round of funding for the state’s Brownfield Support Team initiative — although the economy is still not cooperating with any redevelopment project.

Ludlow Mills will be a 20- or even 30-year initiative, but 2013 could be an important year in terms of laying the groundwork for future success.

 

Union Station

Whether a casino goes in Springfield’s North End or South End, or in Palmer, plans to revitalize Union Station will finally come off the drawing board in 2013 after more than four decades of talk, speculation, and pulling together the needed funding.

Soon, a portion of the site, the old baggage building, will be razed, and restoration work and construction of a new intermodal transportation center will commence. What will become of Union Station depends in some part on where the casino is built and how much involvement the eventual winner of that sweepstakes has in this initiative. But perhaps the bigger question is whether city officials can succeed with efforts to enable the station to gain and keep the attention of the business community. It will be interesting to see how things unfold.

Opinion

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Opinion
An Achievement of Note in Springfield

Last Spring, Gary Bernice raced into a banquet hall, leapt on top of a chair, and led 100 young jazz musicians in a full-blown, off-the-charts performance at the NEPR Arts & Humanities Award. I knew I had to meet him.

The Springfield High School of Science and Technology (Sci-Tech) welcomed Bernice as its new band director in 2007. Initially comprised of only 20 students, the band has grown 15-fold under Bernice’s direction.

So why is this important to the region’s business community?

Today, just as in 2007, the vast majority of students have never picked up an instrument before meeting Bernice. In fact, an entire generation of students within the Springfield public schools has had little to no exposure to the visual and performing arts.

There are 2,076 teachers in the district; only 70 are visual- and performing-arts teachers. Currently, 11 elementary schools have no designated art teacher; many schools have a part-time instructor. In that case, students receive only 24 hours of instruction during the entire course of the school year. What’s more, it’s up to each school principal to determine whether or not to offer visual and performing arts as part of the school’s curriculum.

With a student population of 25,000 and so few arts educators, you can see why some kids get little or no art, music, theater, or dance.

I recently spoke with Carol Hausamann, a retired Springfield public-school drama teacher. She said it was a sad day in 1992 when the decision was made to cut visual and performing arts from the district’s curriculum.

Wayne Abercrombie, director of the Children’s Chorus of Springfield, recently told me about the physical effect of not having vocal music in the schools. “Kids come to our choir without developed vocal muscles,” he said. “The good news is, we can do something about it.”

I’m not saying that the Springfield public schools have no visual and performing arts. I’m saying there aren’t nearly enough — especially when you consider the positive impact they have on students’ academic performance.

A recent longitudinal study among at-risk youth found that 75% of eighth-graders from poor households showed significantly higher scores in science and reading when involved in the arts from kindergarten through elementary school. With 80% of students within the district coming from low-income households, Springfield should take this study to heart.

Just under 84% of Sci-Tech students are from low-income households and are already proving that such a relationship with the arts can be extremely beneficial. According to Bernice, students who were enrolled in band for more than one year have a graduation rate of 80%. Students who stayed in band for two or more years have a dropout rate of 0%.

Keep in mind: the band is a pretty significant proportion of Sci-Tech’s students. This fall, Bernice had 588 students — nearly half the school — trying to get into the band. He could take only 300.

Without diving too deep into the data, it seems pretty clear that art, music, theater, and dance are more than extracurricular activities. And with a decreasing district graduation rate of 52.1% (down from 53% in 2010), the Springfield public schools could use some more of Bernice’s graduation magic.

In a perfect world, every Springfield school would have a Gary Bernice engaging his students and making music. That’s not possible, but with compelling data about the efficacy of programs like the Sci-Tech jazz band and an annual district budget of more than $410 million, it’s clear that we could be doing better.

The Springfield public schools’ number-one core value is: “our students will always come first.” Given this, I trust we’ll see the return of visual and performing arts to the curriculum in every classroom, and in every school, in the district.

 

Nancy Urbschat is president of Springfield-based TSM Design.

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Opinion
Some Things We’d Like to See in 2013

As we prepare to put an intriguing, if unremarkable, business year behind us, it’s time to look ahead to 2013, with some hopes, expectations, and concerns.

Here’s a quick list of some of the things we’d like to see, or not see, in the year ahead.

• First, we only want to see Square One director Joan Kagan’s picture in the newspaper, or this magazine, if she’s at the annual tea wearing one of those big hats or, even better, wielding a ceremonial shovel at a groundbreaking for a new facility in Springfield’s South End. After the tornado in 2011 and the gas explosion in 2012 erased two facilities with Square One signs on the front, it’s time for this nonprofit agency and its leader to get a break and eventually turn these twin calamities into opportunities.

• And now, we return to the issue that dominated 2012 in every way — casinos. It is our hope that the process to determine the winner of the Western Mass. casino moves more quickly, and more civilly, than it did over the past several months. As we said back in the summer, it’s unlikely that anything else is going to get done around here, and especially in downtown Springfield, until we determine where the casino is going to go. So this needs to get settled. And while we understand that this is a competition with very high stakes, we’d like to see more energy put into making these projects work for the region and less energy spent criticizing rival plans.

• Meanwhile, we’d like the players in this market to take a page from the script written in Northeastern Pennsylvania (see story, page 6), where a revenue-sharing agreement was worked out among the communities around Bethlehem, where the casino was eventually built. This casino fight shouldn’t be a winner-take-all proposition. Many area communities will share in the headaches that come with a casino, and they should also share the wealth.

• And while the casino battle plays out, area economic-development leaders have to push ahead with other initiatives because the phrase ‘a casino is not a cure-all’ is not rhetoric — it’s a fact. This region will need other sources of new jobs and other efforts to spark revitalization efforts in area downtowns. We’re encouraged by the work both Springfield and Holyoke are doing to build opportunities with and around the creative economy, and these must continue and expand. At the same time, the region needs to continue to explore new job-creating opportunities in green energy, the life sciences, and other fields.

• UMass will celebrate its 150th anniversary in 2013. It should be a big, year-long party. We’d like to see it capped off with strong movement toward creating a satellite campus in downtown Springfield. Such a facility, perhaps undertaken in conjunction with a casino development, would bring young people and a huge amount of energy to Springfield’s central business district. The timing isn’t good — the state budget situation is getting worse, not better — and there are many other priorities for the state university. But an expanded presence in Springfield would serve both the city and the school, and now might be the time to strike.

• Lastly, we’d like to see more area employers gain the confidence to start hiring again. There are many reasons why most people in business believe we’re still in a recession (even though technically we are not), but the jobless nature of whatever recovery we’re seen is the primary culprit. With more people working, spending should increase, and businesses across every sector would benefit. It’s all a matter of confidence, and we hope that, in the year ahead, this region can find some.

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Opinion
Collaborative Model Spurs Redevelopment



From historic mill buildings stretched along our rivers to vacant properties in our downtown centers, Massachusetts is home to challenging brownfields in need of critical redevelopment. Through our combined experiences working with local officials and promoting economic development, we are committed to revitalizing these contaminated sites to increase housing, business growth, and job creation across the Commonwealth.
Through a collaborative model known as the Brownfields Support Team (BST) Initiative, we are targeting brownfields cleanup and partnering with municipalities to transform once-stalled, blighted parcels into prime development opportunities. We are experiencing tremendous results, including an improved environment and regional economic growth.
First launched in 2008, the BST has coordinated 24 state, local, and federal agencies over the last several years to tackle some of the state’s most complex brownfields. By working closely with key stakeholders, including our partners in the state Legislature, we have delivered more than $18 million in funding to accelerate cleanup, streamline processes to overcome technical roadblocks, and reuse more than 300 acres of valuable property for community and economic development.
We have made great strides in each BST community thanks to the hard work and dedication of municipal leaders, including Mayor Domenic Sarno in Springfield and Mayor Michael Bissonnette in Chicopee. For example, Springfield’s Indian Orchard Park, consisting of 54 acres, was approved by the Springfield Redevelopment Authority to use 12 acres for a 2.2-megawatt solar-power-generating facility. The success of this collaborative approach in redeveloping the site was recognized at the Brownfields 2011 Conference Transaction Forum in Philadelphia.
In neighboring Chicopee, the former Facemate Property was designated in the second round of the BST. Since 2010, we have worked with the city to demolish unused property and help pave the way for mixed-use redevelopment. Construction began on the first phase of the new complex — now known as RiverMills at Chicopee Falls — earlier this year to create a 21,000-square-foot senior center.
Similar success is underway in other BST communities, including Worcester, Grafton, Fall River, and Haverhill, each designated in the first round of the BST initiative, and Gardner, Attleboro, Somerville, and Chelmsford, designated in the second round. We have also collaborated with the city of Brockton to assess a list of sites in need of redevelopment.
In both our leadership roles, we often hear about the need to balance environmental protection with economic development. Fortunately, these are not mutually exclusive goals. By increasing collaboration across state agencies and working with stakeholders, we have made brownfields reclamation a priority for the Patrick-Murray administration and the Commonwealth.
With local, state, and federal government working together, once-blighted and contaminated parcels are becoming launching pads for community renewal and business growth.
Massachusetts has been recognized nationally for the success of the BST model. Most recently, the U.S. Environmental Protection Agency noted our strategy in redeveloping complex brownfields sites and awarded $6.75 million to Massachusetts.
This federal funding is a testament to the effective approach we are using in our communities, and we are extending the BST strategy to more cities and towns across Massachusetts. During Brownfields Month in November, sites in Ludlow, Fitchburg, Boston, Amesbury, and New Bedford were designated in the latest round of the BST Initiative.
We look forward to engaging more communities to transform brownfields into development-ready parcels and spur housing and job creation. With this strategy, we will continue to promote this partnership to help deliver long-term economic growth and environmental sustainability in Western Mass. and beyond.

Timothy P. Murray is lieutenant governor of Massachusetts. He launched the Brownfields Support Team Initiative in 2008 with Gov. Deval Patrick. Marty Jones is president and CEO of MassDevelopment, a key member of the Brownfields Support Team and administrator of the Commonwealth’s Brownfields Redevelopment Fund.

Editorial

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Opinion
A Powerful Show of Unity on Literacy

 

“Reading is the cornerstone of academic success. In fact, educators attest that, until third grade, a child learns to read. After third grade, a child reads to learn. Further, a child who enters fourth grade unable to read proficiently is far less likely to graduate from high school, become an effective citizen, and develop the skills essential for contributing to the 21st-century economy.”

This was the first paragraph of a case statement, or proposal, for the establishment of something called the Funder Collaborative for Reading Success, a document, inked more than a year ago, that apparently got its points across in a meaningful way.

That’s because more than a dozen organizations are now standing together in this ambitious endeavor, having donated close to $1.5 million between them in the all-important fight to make young people in this region more proficient at reading by the time they reach the fourth grade.

And a few months ago, some of this money was put to work, with three grants, totaling nearly $325,000, awarded to five early-literacy and learning programs. These include the Eric Carle Museum of Picture Book Art and its Links to Literacy and Learning program; the Hasbro Summer Learning Initiative through the Regional Employment Board of Hampden County; the Springfield Collaboration for Change and its Home-School Family Literacy Project; Square One and its summer and after-school enrichment programs; and the Springfield College AmeriCorps Student Success Corps program.

It’s far too early to attempt to quantify and qualify the payback from these grants, but it’s certainly not too early to say that this is money extremely well-spent, because, as we’ve said many times, perhaps the biggest issue involved with mitigating the cripplingly high levels of poverty in this region is education, and, more specifically, childhood literacy.

Meanwhile, the Funder Collaborative has, by all indications, become an innovative and highly inspirational method to address some of the larger societal issues facing this region, one that can and should be borrowed for matters ranging from workforce development to combating racism.

But let’s back up a minute.

The Funder Collaborative was launched in early 2011 when the Irene E. & George A. Davis Foundation, which has long been a strong advocate for early-childhood education and a driving force behind the Read! Reading Success by the Fourth Grade initiative, decided that this fight was too big for it to tackle alone.

So it asked a number of area foundations and major employers to join the fight. One of the first to join was the SIS Fund, a charitable foundation left over from the bank formerly known as Springfield Institution for Savings. The list of funders now also includes the Berkshire Bank Foundation, Babson Capital Management LLC, Baystate Health, the Beveridge Family Foundation, the Community Foundation of Western Mass., Hampden Bank, MassMutual, the Nellie Mae Education Foundation, the Peoples United Bank Foundation, the TD Charitable Foundation, and the United Way of Pioneer Valley.

The prevailing theory behind creation of the collaborative is that, by working together on this one issue, these groups could accomplish much more than a single entity or a few organizations moving in different directions — and we believe that thinking is sound.

And there is no more important issue facing this region at this time than reading proficiency among young people. Currently, fewer than 40% of Springfield’s children read at grade level by the end of the third grade. Unless those numbers improve substantially in the years to come, the cycle of poverty that has strangled the city will continue, and the strong workforce needed to take on the jobs in today’s knowledge-based economy will fail to materialize.

The programs funded with the first round of grants are designed to introduce children to books, continue the learning process throughout the year, and, in essence, make students fully able to read to learn.

The Funders Collaborative is really just getting started, but it’s certainly not too early to call this an unqualified success story — on many levels.

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Opinion
Electronic Health Records Bring Change

Implementation of electronic health records (EHRs) is bringing a cultural change to daily medical practice operations in the Bay State. The National Center for Health Statistics estimates that 71.2% of Massachusetts office-based physician practices used some kind of EHR in 2011.

For practices that haven’t adopted EHR technology yet, the time is now. EHRs are important for enhancing patient care delivery and collaborating in accountable-care organizations (ACOs) or integrated care networks. In order to adopt EHRs effectively, practices should be aware of several points essential for success.

Evaluate Information Use and Flow: EHR implementation can disrupt a well-functioning system. Before adopting a new system, a practice should evaluate its own existing care system and consider the following questions: What systems are already in place? How is information recorded and exchanged? Who needs what kinds of information? Where do they use it? Once equipped with those answers, practices should be prepared to take the next step.

Find a Compatible EHR: Several key considerations must be made when choosing an EHR, including flexibility, user-friendliness, mobility, and transition support. Flexibility must account for customization of the system, mobility is necessary for sharing patient information throughout the care setting, and transition support ensures a smooth integration of the EHR into the practice’s workflow.

Institute Team-wide Acceptance: Most importantly, groups should ensure that the workplace dynamic is maintained throughout EHR implementation. Teamwork should not suffer at the hands of technological innovation. Therefore, it is paramount that the system sustains the work environment.

EHR use will benefit patients and practices alike. Streamlined data will allow for streamlined care. Not only can patient care be enhanced through EHRs, but practice-wide improvements in communication, productivity, and data utilization can occur as well.

For assistance with EHR implementation or general practice issues, contact the Mass. Medical Society’s Physician Practice Resource Center at (781) 434-7702 or [email protected]. v

 

Leif Brierley writes about medical-practice issues for Vital Signs, a publication of the Mass. Medical Society. The MMS is the statewide professional association for physicians and medical students, representing more than 24,000 members statewide. The MMS is also a leader in continuing medical education for healthcare professionals throughout Massachusetts, conducting a variety of medical-education programs for physicians and healthcare professionals.

Editorial

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Opinion
Holyoke’s Time Is Now

 

While much of the attention locally has been fixed on the issue of a Western Mass. casino, where it will go, when, and with what impact, there is an intriguing story being written just a few miles up I-91 from Springfield in Holyoke.

It’s not complete yet — in fact, it’s just getting started — but some of the chapters in progress are enough to warrant optimism in a city that has a rich industrial history but a turbulent recent past and status as one of the poorest communities in the Commonwealth.

As the story on page 44 reveals, there is considerable momentum building in what’s known as the Paper City, and there may be some important lessons here for those communities that don’t wind up with a casino — and even for those that do.

Holyoke is rebuilding itself the old-fashioned way, if you will, going one block, sometimes one building, at a time, using the creative economy as a way to create vibrancy and interest, and building a reputation as a place where technology and green-energy-related businesses can take hold.

As we said at the top, there is a long way to go in this, the nation’s first planned industrial city, but the signs of a strong comeback are there, and the elements for continued progress are in place or in the works.

Start with stories like Steve Porter’s. He was working and living in New York, and looking to take a traveling DJ business and expand it into a video-production venture. Real estate in New York was well out of his reach, so he started looking for another setting in which to set up shop. He found an oddly shaped building in a former textile complex known colloquially, and within Porterhouse Media, as the ‘wedge.’ Not much to look at on the outside, the building has become home to cutting-edge studios and offices with tight corners and unique square footage.

In many ways, Porter and his building represent the essence of the emerging Holyoke story — a small business finding a good home in a piece of property that many people wouldn’t bother to look at. It’s a story that could be replicated dozens of times, and that’s the simple message that Porter wants to leave with anyone who hears of how he came to Holyoke.

As he retells it, it wasn’t simply the price tag on the property that attracted him — although that was a big part of it. There was also a sense that something interesting, something exciting, was happening in Holyoke, and he wanted to be a part of it.

Vitek Kruta and Lori Devine felt the same way when they, like Porter, assumed a large amount of risk by opening Gateway City Arts in the former Judd Paper complex on Race Street.

Describing themselves as enablers, Devine and Kruta have a host of things going on in their complex — from tango classes to painting lessons; from performances and lectures to an incubator facility currently with a handful of tenants and potential for about 20 more.

The broad goal is to use the arts as a way to bring people to Holyoke, create energy and vibrancy, and perhaps give birth to some businesses that will repurpose more old mill space and put people to work.

As these stories and others unfold, the pieces of a puzzle are coming together for Holyoke. Creative-economy initiatives are introducing the city to more people and business owners, while the Green High Performance Computing Center, a collaboration involving several universities and technology corporations, give the community “affirmation,” as one entrepreneur out it, while also showing what this city can do. Rail service is returning on a limited basis, and old mills like Open Square continue to add new tenants and bring more vibrancy to the heart of the city.

Holyoke’s comeback story is far from complete, and there are many challenges ahead, but all the signs are there for a turnaround that will be real — and very inspirational.

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Opinion
The Dangers of Our Budget-deficit Minuet

The day after Barack Obama was re-elected, the Dow Jones lost 312.96 points. It wasn’t just that investors were hoping for the lower taxes and further deregulation that would have come with a Romney win. The news from Europe was bad, and pundits were obsessively focused on the ‘fiscal cliff’ of mandatory budget cuts that will drive the economy into a new recession unless Congress jumps off its own budgetary cliff first.

For once, the markets are right. But the news from Europe entirely contradicts conventional assumptions about the fiscal cliff.

Greece, which has dutifully cut its budget as demanded by the leaders of the European Union and the European Central Bank, is deeper in depression than ever. The latest reports show that its economy has shrunk by more than 20% over four years and that the more that it cuts its deficit, the more its national debt grows.

How can that be? Budget cutting in a depression just deepens the depression. The deeper the depression, the less revenue the government takes in.

So if the U.S. does not want to become like Greece, cutting the deficit in a still-depressed economy is the wrong way to go.

The ravages of Hurricane Sandy, with rising oceans forecasted to worsen in coming years, suggests that we will need to spend hundreds of billions of dollars on rebuilding coastal infrastructure — a policy that will also create jobs and stimulate a recovery.

But the deficit-reduction minuet is proceeding as if Sandy never happened.

President Obama and House Speaker John Boehner are on track to cut a deal that Wall Street has been slavering over for a decade — a small dollop of revenue increases, mainly through loophole closings, coupled with massive spending cuts, including in Social Security and Medicare, adding up to $4 trillion to $5 trillion of budget cuts over a decade.

Obama is convinced that this sort of grand bargain is necessary because financial markets expect it. Yet the same financial markets are happy to lend the government money for 30 years at less than 3% interest.

If Obama and the Republicans do make such a deal, growth will slow to a trickle.

Ironically, the president, having humiliated the Republicans on Election Day, holds most of the cards.

He can declare that he has no intention of cutting Social Security or Medicare and instead propose new, must-pass infrastructure legislation. And he can insist that any budget deal needs to include higher taxes on the rich. (California Gov. Jerry Brown just demonstrated that such a stance is good politics. The initiative that he sponsored and worked for, raising taxes on the rich to increase funding for California’s public schools, was approved by the voters.)

Time is on Obama’s side. On Jan. 1, taxes increase on everybody, and automatic spending cuts of $1.2 billion kick in. He needs to set up the Republicans to take the blame because of their wildly unpopular conditions for a deal. Bill Clinton, who won a similar game of chicken with Newt Gingrich in 1996, can give Obama lessons in the art of the bluff.

Re-elected presidents often face a jinx in their second terms. The worst possible start for President Obama would be to agree to a deal that harms the economy and sells out the people who just re-elected him.

If there is one thing worse than a fiscal cliff, it is a fiscal cave. This is no time for Obama to cave into Republican and Wall Street pressure for a budget deal that will leave history to remember him as the Democrat who presided over eight years of a depressed economy. v

 

Robert Kuttner is co-founder and editor of The American Prospect.

Editorial

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Opinion
The Casino is a Citywide Issue in Springfield

The Springfield City Council is apparently still gathering information and formulating a decision on whether the vote to support a specific resort-casino proposal in the community should be citywide. We understand the need to be thorough and to hear different voices on this subject, but in our opinion, this is a no-brainer, a decision that should have been made a long time ago.

This is a matter that impacts every section and every citizen of Springfield, no matter where the casino is built, so it should certainly be an issue for the entire city to decide.

This has become even more clear over the past several weeks as details have emerged on the three dueling casino plans — in some cases more than others. When one looks at the size and scope of the proposals, it becomes evident that a casino will alter the look, the feel, the perception, and, most importantly, the future of the city.

The phrase ‘game-changer’ has come into vogue in recent years — mayors seem to love it — and it is often overused and used incorrectly. But in this instance it fits; a casino will definitely change the game in Springfield and in surrounding communities as well.

There are some who would argue that, because a casino will be located in a certain neighborhood, only that ward, or precinct, should be able to vote on the matter, because those residents will be the ones most affected by such a development. Boston’s Mayor Thomas Menino seems to be in that camp, because he’s fearful that residents who don’t live in Revere or East Boston might not support a huge casino proposed for Suffolk Downs.

And such thinking probably explains why the state’s new gambling law permits large cities like Boston and Springfield to limit a casino vote to a host ward.

But Springfield’s officials shouldn’t take advantage of that provision. Whether a Springfield casino is built off Page Bouvelard, in the South End, or in the North End, it will have implications that will reach into Sixteen Acres, Forest Park, Mason Square, and Indian Orchard. There will be jobs, tax revenue, and donations from the chosen casino operator to groups and causes that represent the entire city. There will also be inconveniences from construction, traffic problems, and a negative impact on many different kinds of businesses because of the dollars that will instead be flowing into a casino.

Springfield will become the destination that people have long wanted it to be, and because of that, it will change in every way that an urban center can change. Such a decision can’t be left to a small fraction of the city’s population.

There are many decisions that have to be made in Springfield over the next several months on the casino issue. Most, including the ultimate decision on which plan or plans will go before the voters on a referendum, will involve a high degree of difficulty.

Indeed, as details on the proposals emerge, it becomes clear that they all have merit, question marks, and potential. Choosing a finalist or finalists will be a hard decision.

What shouldn’t be hard is deciding who gets a voice on this matter. Everyone who calls Springfield home should have a say.

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Opinion
Valley Gives: A Celebration of Generosity

The Pioneer Valley has a long tradition of philanthropy — a culture of giving that has benefited youth- and family-serving organizations, educational initiatives, colleges and universities, healthcare institutions, and many other community-serving organizations in Franklin, Hampshire, and Hampden counties.

This generosity has had a meaningful impact on life in the Valley, even if this can be difficult to quantify. For much of the previous century, this generosity in our region sometimes was quiet, because those with means directed their contributions to one particular organization or even anonymously to the causes for which they had a passion.

In time, there came a desire to gather the philanthropic instinct of the Valley into an organized movement. Thus, in 1991, a group of local visionaries — led by our friend, the late Dick Stebbins, and others — helped to form and launch the Community Foundation of Western Mass.

In just over 20 years, the Community Foundation has grown into a respected institution, responsible for $121 million in assets for which it has grant-making responsibility. In just the last year alone, the foundation rendered $7.8 million in grants, $2 million of which went to scholarships and educational loans. And philanthropy continues to be on the rise in the Valley, as new gifts to the foundation for the most recent fiscal year totaled $8.4 million.

These are impressive numbers for sure. But there are many nonprofits in the Valley that need help, and, currently, there are not sufficient resources to support all of them adequately. We also know there are so many more in the Valley who are generous, who want to help the causes, organizations, and initiatives that make living in here so special.

At the same time, there is ample and growing evidence that philanthropy from the grassroots is well on its way to dwarfing traditional philanthropy. In 2001, just 4% of Internet users made an online donation. By last year, 65% of Internet users, a huge number, made an online donation. Over the past five years, fund-raising through social media alone has doubled to almost $1 billion.

Early last year, as longtime supporters of the Community Foundation, we approached the organization’s leadership to discuss how to get more individuals, from every corner of the Valley, involved in growing this culture of giving in the region.

After much discussion, research, and outreach to find successful models for inspiring new donors, we discovered community ‘giving day’ campaigns throughout the U.S. that in a single 24-hour period have raised millions for nonprofits. This tapping in to community-wide generosity served as the inspiration for the launch of Valley Gives.

The impact of community-giving days has been swift and impressive. In Minnesota, Nevada, Michigan, and New Haven, Conn., millions of charitable dollars have been raised from tens of thousands of donors in just one day. These results confirm that Americans welcome online giving. We think we can have the same success here.

In short, Valley Gives is a one-of-a-kind celebration of generosity in Franklin, Hampshire, and Hampden counties. On Dec. 12 — 12/12/12 — residents of the three counties will join together for 24 hours of special events and online campaigns with the goal of getting thousands of Valley residents to make gifts to their favorite charities and nonprofits.

Anyone with a computer or mobile device, which is just about everyone, can participate. Starting at 12:01 a.m., residents of the Valley can visit the website, find the cause they care most about — or several at the same time — and make their contribution online. On the 12th, there will also be mobile giving stations located at areas of high foot traffic, such as malls.

The choices in spreading generosity and making a difference will be many — more than 250 nonprofits and the critical work they do will be represented on the Valley Gives website.

The initiative has an ambitious goal of raising $1 million in a single day from thousands of donors, large and small, via the Internet, much of it driven through social media, to help our nonprofits sustain and expand the important work they do.

We hope you will join us in supporting the causes and initiatives you care about by giving in this new way. Valley Gives is likely to engage more individuals supporting more causes in our region than ever before. Visit the website valleygivesday.org and be a part of starting something new, something big, in the Pioneer Valley.

Al Griggs and Paul Doherty are business leaders, supporters of the Community Foundation, and catalysts for the
Valley Gives initiative.

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Opinion
I-91: Imagine the Possibilities

State and city officials went public recently with reports that the elevated section of I-91 that slices through downtown Springfield is in very poor condition (that’s not a news flash) and in need of repairs and rebuilding that will cost north of $400 million (that is news — and a very big number indeed).

These revelations have led to some early speculation — or daydreaming, depending on your point of view — about possibly making this a surface road or perhaps even taking that stretch of the highway and putting it underground, like Boston’s Big Dig. Neither of these options is very likely, due largely to the nightmarish delays and cost overruns that made two three-letter words, ‘big’ and ‘dig,’ synonymous nationally and internationally with ‘disaster.’

But it would be nice to dream.

That’s because this stretch of I-91, like many of the highways built in the ’50s and ’60s as part of the Interstate Highway System, helped link cities, while also destroying much of their fabric. Inspired by urban planners such as New York’s famous (and infamous) Robert Moses, highways such as I-91 helped suburbanize America while also accelerating the demise of once-proud urban centers — like Springfield.

I-91 made the city more accessible than ever before. But that accessibility came with a steep price. Some thriving neighborhoods, especially the South End, were cut in two, with many homes, businesses, and parks destroyed to make way for the highway. Indeed, in the days after the tornado that touched down in that neighborhood 16 months ago, many long-time South End residents and business owners said that was the second disaster to befall the area, with I-91 being the first.

The new highway took people to Springfield, but it also took them right through it and on to other destinations, such as the Holyoke Mall, downtown Northampton, and Hartford, and it would be fair to say that there has been more of the latter than the former, and this has been one of many factors that have contributed to Springfield’s decline over the past 45 years and only modest recovery.

But it is also I-91 and other connecting highways, such as I-291 and the Turnpike, perhaps more than other factors, that have made Springfield the first choice of three companies that want to win the coveted license for a Western Mass. resort casino. People would like to think the city’s quality of life, available real estate, and the fact that its residents will likely support a casino have made the idea popular, but the bottom line is, what makes Springfield attractive is that you can get there — and very easily — from just about anywhere.

Unless something miraculous happens and the state becomes willing to take on another project like the Big Dig, it seems certain that the elevated section of I-91 will be subject to an endless string of patch jobs designed to lengthen the road’s useful lifespan. This will lead to more disruption downtown (recent potholes have caused huge traffic tieups) and perhaps two or three more decades of the status quo.

It will also mean many more years of trying to find ways for Springfield to thrive in spite of the highway. Efforts to date have not been very successful, although the riverfront is much more vibrant than it was decades ago and a casino promises to bring thousands of people to the city each day to at least gamble for a few hours.

According to local legend, the original plan was to put I-91 on the west side of the Connecticut River, but some powers that be decided that this wasn’t prudent, practical, or both. Springfield has had to coexist with the highway ever since, and for the most part, it has suffered due to its existence.

While daydreaming about removing the eyesore from the landscape, city and regional officials will likely have to make do with finding more ways to leverage the road as an asset and live with its drawbacks.

Because it’s highly unlikely there will be an opportunity to live without it.

Opinion

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Opinion
Not All Jobs Are Created Equal

We heard the presidential candidates discuss their views again at the most recent debate, and it is clear that they agree on at least one thing: jobs and job-creation policies are critical to the future of the economy. Yet, like many politicians, policy makers, and pundits, the candidates continue to gloss over what both men certainly know to be true: not all jobs are created equal.

Based on our work at the Martin Trust Center for MIT Entrepreneurship, we see two clear and distinct routes to new job creation.

There are small and medium-sized companies created to offer traditional goods and services to a local or regional market. Think ‘mom-and-pop’ operations. They include your yoga studio and the pizza place down the street. While valuable to the economy in general, these companies are not large enough to serve as a growth engine for the entire economy. They do, however, offer important opportunities for employment and provide valuable services.

The other route to job creation comes from exploiting new technological advances to create businesses that aim to compete in a global market. Think of a large pharmaceutical company or biotech firm.

Both small companies and innovation-driven enterprises create jobs, but the types and numbers of jobs they create are remarkably different.

Small businesses are a vital part of our economy, particularly for individuals with relatively lower levels of education and skills. They give people the opportunity to work independently and to use their skills, particularly in times when large, established companies are laying off workers. Unfortunately, many small businesses employ only the founder and spouse or just a handful of workers. These companies create jobs, but they typically provide lower-than-average wages and poor benefits.

Contrast these companies with the innovation-driven enterprises. These companies seek to address global markets — offering goods and services based on some kind of substantial innovation linked to a clear understanding of a specific market.

These companies generally employ individuals with high levels of education and training. New biotechnology companies, for example, are usually founded, led, and staffed by physicians or individuals with MBAs or PhDs in molecular biology. As these companies grow, they also create a wealth of high-quality, auxiliary employment for those with lower skills — laboratory technicians, manufacturing staff, hospital workers, etc. The Massachusetts governor’s office has calculated that for every high-level biotechnology job created, five lower-level jobs are also created.

Yet politicians and policy makers often fail to make a distinction between jobs created by small ‘mom-and-pop’ enterprises and innovation-driven enterprises. It is a critical mistake. They are different, and the policies to support them differ.

Small-business creation is an important part of job creation, but it is only a part of what is needed to create large transformations in the economy. Innovation-driven companies generate many more new jobs and exports than small business.

If job creation and economic prosperity are the goals, innovation-driven entrepreneurship must be a major element of government strategy and policymaking. Not all jobs are created equal, and we need both kinds of companies in order to create the vibrant economy both candidates are seeking and voters are demanding. As a result, separate and equitable organizations need to be set up, with different programs and mindsets. From training programs and tax incentives to business accelerators and mentoring activities, entrepreneurial support programs must be designed differently for innovation-driven enterprises and small-business entrepreneurs.

Policies and politicians who lump both sorts of entrepreneurs together are likely to fail. Going forward, both candidates need to address job creation in a way that recognizes the distinction between the two types of organizations.

 

Bill Aulet is managing director at the Martin Trust Center for MIT Entrepreneurship and senior lecturer at the MIT Sloan School of Management. Fiona Murray is faculty director of the Martin Trust Center for MIT Entrepreneurship and professor of Management of Technology at the MIT Sloan School of Management.

Editorial

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Opinion
Time to Step Up on Public Higher Ed

 

Throughout its history, Massachusetts hasn’t paid much attention to public higher education.

And until fairly recently, one could make the case that there simply wasn’t much reason to. There were few of these institutions and a corresponding bevy of private colleges and universities — from Harvard to Williams; from Wellesley to Smith — that took care of most of the heavy lifting when it came to educating our young people.

And then, when there was reason to pay more attention — starting a few decades ago when the private colleges began focusing on educating people from around the world, not from across the Commonwealth — state leaders seemed more preoccupied with other matters, especially K-12 education, for which they have always had a soft spot.

One could say that the state undersupported public higher education, and in a number of ways, because it could choose to do so and seemingly get by.

Not anymore.

That’s the underlying message of a revealing report commissioned by the state Department of Higher Education titled “Time to Lead: The Need for Excellence in Public Higher Education,” which offers the first comprehensive view of where the Commonwealth’s public higher education system stands in comparison to other states (see related story page 6).

Sifting through the document’s 84 pages, one could come to the conclusion that the state isn’t doing so bad. It’s ahead of national averages in some measured categories, such as the percentage of students who go on to college and the number of people who complete college. And it’s not far off the average in most others, such as achievement gaps in college preparedness and aligning public degree programs with future needs in various fields, such as healthcare.

But what the report attempts to drive home is that being average is not good enough — and it certainly won’t be in the years to come — and there is a steep price to pay for not being a national leader in public higher education. That’s because statistics show that ever-increasing numbers of jobs will require some college education, and that more students who do attend college are turning to public institutions, largely due to accessibility and price.

Meanwhile, the demographic character of the country is changing, and groups that are now in the minority, such as blacks and Hispanics, will soon comprise the majority, and the Commonwealth is clearly trailing leading states when it comes to enrollment rates involving these constituencies and overall achievement gaps.

As Richard Freeland, the state’s commissioner of Higher Education, told BusinessWest, the state’s only significant resource is brain power, and if it fails to make full and effective use of that resource, it will not be able to compete for what is fast becoming the most precious commodity on earth: jobs.

There were several hundred people on hand at the State House late last month to hear Freeland, Gov. Deval Patrick, UMass President Robert Caret, and others talk about the report and make the case that the state simply must make a greater commitment to public higher education in the years and decades to come. Those same messages will be sent at the Western Mass Business Expo on Oct. 11, when Freeland and a panel of public higher-education leaders and representatives of the business community will assess “Time to Lead.”

It is our hope that people will listen and that the state’s leaders will finally get the point. While there may (that’s may) have been a time when the state could get away with not being a national leader in public higher ed, that’s certainly not the case now.

Opinion

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Opinion
United Way: 90 Years of Meeting Needs

On occasion, we are asked, “why give to the United Way and not simply make a direct contribution to my agency of choice?” This is a very important question for all of us at the United Way, and here are a few answers.

The United Way is a volunteer-driven organization committed to addressing the most critical needs in our community. We determine those needs by researching and analyzing the prevalence of a social problem and the critical needs in the communities we serve. After gathering the data, we look for opportunities where an investment of funding will yield a measurable return on the investment.

We are no longer simply reporting the number of people served, but also focusing on the outcomes of the service provided. This no easy feat given the reality that it often takes years to change behaviors and achieve tangible outcomes and results, but we know we are making an impact based on benchmarks and regular reports. We are also implementing and supporting science-based and results-oriented approaches and service-delivery models that have demonstrated positive outcomes in communities like ours. We are holding the organizations (funded through a competitive grant-making process) accountable, and we are holding ourselves accountable to the thousand of donors and investors.

United Way of Pioneer Valley has embarked on its celebration of 90 years of service in the Pioneer Valley. Over the past decade, UWPV has distributed more than $50 million dollars to nonprofits serving children, families, elders, and individuals with special needs and circumstances. The dollars help support those services that feed the hungry and offer emergency housing and assistance for victims of domestic violence, homelessness, and fires. Critical funding is also dedicated to improving high-school graduation rates, early-childhood education, reading by grade 4 in Holyoke and Greater Springfield, and youth development and prevention services.

We recently launched a regional initiative to address income disparities, workforce development, and the financial stability of low-income and working families. These efforts will not only strengthen families, but will impact quality of life and economic development throughout the Pioneer Valley. Over the last three years, we have also committed resources to help nonprofits build greater capacity through partnerships and collaborations, so limited resources can provide expanded services to youth and families; every dollar invested leverages additional dollars from other funding sources.

Additionally, our financial support of Mass 211, an information and referral system, provides an immediate response to individuals searching for social services in their respective communities. Residents in our service area (Hampden County, South Hadley, and Granby) are the second-highest users of Mass 211 in the Commonwealth. What an amazing resource financed through contributions made to the United Way. These are examples of investments for the common good, and we will all benefit.

Our 90th anniversary has provided an opportunity to reflect, rejuvenate, and rejoice. We would like to thank our corporate, business, and social-service partners for hosting annual workplace campaigns, and our donors who make online contributions or send a check in the mail. Special thanks to the board of directors and our volunteer leaders, campaign coordinators, and local, regional, and statewide supporters. Your contributions of time, talent, and money truly make a difference.

Our resolve is to continue the rich tradition and history of this organization and do more to address the escalating social needs and conditions confronting our communities. How can we do more? Through the generosity and investment of individuals who believe they have a responsibility and desire to contribute to the common good of all. These people remain essential to our efforts. Please join us in celebrating our 90th anniversary. Visit our website (www.uwpv.org) for information about how you, too, can Live United … Today. Tomorrow. Forever.

Dora Robinson is the president and CEO of the United Way of Pioneer Valley.

Editorial

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Opinion
It’s Time to Be Very Smart About Things

We were encouraged to read recently that Springfield Mayor Domenic Sarno has backed off on his stance that only one casino proposal involving the city would be forwarded to the Massachusetts Gaming Commission for consideration.
“I have instructed our city departments and our consultants to conduct an open, fair, and robust competitive process that will allow me to choose the project or projects that best meet the city’s selection criteria,” said the mayor in a prepared statement issued a few weeks ago, one that used the words that should define this process until it is concluded: open, fair, and robust.
And it is with those words in mind that we applaud that decision and offer another strong reminder that, given the gravity of the situation, city officials must be extremely diligent in every decision made involving this matter, because mistakes can be costly, and in a number of ways.
And there is already ample evidence that the city hasn’t done that kind of diligence before making some rather critical decisions involving the casino issue.
But first, regarding the mayor’s decision to allow casino proposals, in the plural, to move on to the Gaming Commission: this makes all the sense in the world, because it heightens the competition, improves the city’s odds of eventually landing a casino within its borders, and brings a much higher level of integrity to the process.
Indeed, singling out one proposal would put too much power in the hands of the Springfield Casino Site Committee — when it belongs with the state Gaming Commission — and raise questions about the overall integrity of the process, given that this panel was selected by city councilors that have more than a passing interest in where the casino goes.
Initially limiting the Springfield casino sweepstakes to one horse is one of those decisions that apparently were not thought through by those who have been making them. And there are more examples of this.
Such as the hiring of the Chicago-based law firm now consulting for the city on the casino matter. That firm, Shefsky & Froelich, is a lobbyist in Illinois for MGM Resorts and Penn National Gaming, two of the casino companies vying to place a facility in the City of Homes.
Officials with Ameristar Casinos, another company that wants to build in the city, have raised questions about whether the consultant’s relationship with its competitors indicates a possible lack of neutrality on the matter, and they are right to do so. Shefsky & Froelich is now asking for a ruling on the matter from the state Ethics Commission, and Stephen Crosby, chairman of the state Gaming Commission, has gone so far as to ask Sarno to postpone the process for selecting a casino until the matter of a potential conflict of interest is resolved.
It seems logical that these questions should have been answered before the firm was hired, because failure to do so raises more questions about competence and integrity.
Meanwhile, there are questions about the Springfield Casino Site Committee itself, mainly about why the general manager of a local television station (Bill Pepin, of WWLP-TV 22) is a part of that mix.
MGM Resorts has already spent thousands of dollars with the station, and other players will likely do the same, creating what would by all accounts be a huge conflict of interest. Pepin is a very intelligent, thoughtful individual who has done a lot for Springfield over the years, but he simply shouldn’t be on this committee and accepting advertising dollars from casino companies at the same time.
In defense of those who have made these decisions over the past several months, they are maneuvering through uncharted waters; the state and this city have never gone through a process like this before. Meanwhile, it is becoming increasingly difficult to find an individual or company that doesn’t have some stake in the outcome of this casino contest.
That said, though, it’s critical that all those involved with this matter be extremely thorough, fair, and transparent in everything they do in order to ensure a process that is above reproach.

Editorial

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Opinion
Moving Beyond the Pretty Pictures

MGM Resorts International staged a lavish press event at the MassMutual Center last week to announce its plans to build a casino and entertainment complex in Springfield’s South End. There was an overflow crowd, music, high-tech imagery, performers from Cirque du Soleil, and a full complement of media.

Springfield hadn’t seen anything quite like it before, but it will see something like it again, and probably very soon. Indeed, with the MGM event, the casino era in Western Mass. entered a new and intriguing phase. Let’s call it the ‘pretty pictures stage.’

Actually, they’re architect’s renderings, and there were a few on display in the packets being handed out at the MassMutual Center. They showed a South End teeming with people, lights, and vibrancy, a stark contrast to what exists now. Older buildings and properties damaged by last year’s tornado had been replaced by storefronts, restaurants, and attractive buildings for market-rate housing.

And along with the pictures came promises, in this case to connect the casino complex with downtown entertainment venues, such as the MassMutual Center, via a pedestrian walkway, thus eliminating one of the major complaints about casinos — that they keep people inside their walls and don’t spread the wealth. There were also pledges to incorporate existing downtown buildings, such as the former MassMutual headquarters at the corner of State and Main streets, and existing businesses, such as the Red Rose pizzeria, into the MGM complex.

There will be more of these press events, renderings, and promises in the weeks and months to come. There are casino plans unfolding for the North End of Springfield, involving the Republican building and other parcels, as well as the old Westinghouse complex in East Springfield, and perhaps another for a site in the middle of the central business district.

The trouble with these images, however, is that they tend to blind people, create expectations, and, in many ways, distract them from any other form of economic development and urban revitalization.

Indeed, with the start of the pretty pictures stage, it is quite evident that Springfield, and this region as a whole, needs some form of resolution to the question of where the casino is going to go — and the sooner the better. That’s because nothing is going to get done until that $64,000 question is answered.

Look at what has happened in Palmer. Mohegan Sun started putting out pretty pictures of what a casino on the hill just off the turnpike exit would look like, and the town has been in what amounts to a trance since. Granted, there is nothing approaching a Plan B for job creation and overall economic development in that community, but nothing else will even be considered until the casino matter is resolved.

In Springfield, we’re starting to see signs of the same thing. The phrase ‘tornado reconstruction’ seems old and passé. The matter of rebuilding the battered South End is on the back burner, and it will stay there until the winner of the Springfield casino sweepstakes is announced.

The same is true for other areas of the city, including the North End and the center of downtown. Almost everything now seems to hinge on where the casino will go — if Springfield lands one at all — and what the plan entails.

So it is incumbent upon those who will be making the decisions locally and then on a statewide basis to be diligent, thoughtful — this could be, after all, the biggest development in Springfield since the building of the Armory more than 200 years ago — but also expeditious.

There are currently about as many casino plans for Springfield as there are for the rest of the state combined, and the longer we have to look at the pretty pictures, consider the possibilities, and speculate, the longer it will be before we can move this city forward.

Editorial

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Opinion
New Restaurants Will Spice Things Up

Call it the coming burger battle.
That’s one way to describe the upcoming — and in some ways ongoing — change in the restaurant landscape in Greater Springfield.
Indeed, while every restaurant already has a good burger — or two, or three — on the menu, the Springfield area will soon be host to three restaurants specializing in so-called high-end burgers, and there are several other establishments already in the market that might fit that description, depending on how you define it.
It’s safe to say that no one will be asking that question from the early ’80s, ‘where’s the beef?’ It will all around us, and taking interesting names, like the Frankenstein, the Double-Double, Death by Burger, Fatty Melt, and a host of others.
But what does it all mean in the larger scheme of things when it comes to the economic health and well-being of this region? Maybe not much on the surface, but then again, it’s another piece of the puzzle, at a time when the region needs to be filling in those pieces.
As we’ve said on many occasions, the Greater Springfield economy is still in the process of reinventing itself from its days as a manufacturing hub. There are many facets to this reinvention, as the cities that have been through the process with a great deal of success — like Providence, Lowell, New Haven, and others — can attest.
Part of it concerns building vibrancy, creating a buzz, if you will, and making the area in question a destination — a place that people will want to visit, but also work, live, and start a business. High-end burger restaurants can’t do that alone, but they can be part of the broad solution.
As the story on page 6 explains, Max Burger, a category in the Max’s chain that has thrived in Connecticut, has opened in the Longmeadow Shops. Meanwhile, Plan B Burger, which has several locations in Connecticut, is opening in the Basketball Hall of Fame in a few weeks, and Luxe Burger, an operation with one existing restaurant in Providence, is opening in the former visitors center a block from the Hall.
With those latter two, people are already asking ‘where are they going to park all the cars?’ Good. Parking problems are actually a good thing; they connote vibrancy and the fact that people want to come to your city. Northampton has long had a parking problem that other cities and towns in this region would love to have.
The interest shown by these restaurant groups in Greater Springfield — and, more specifically, the city’s riverfront — is encouraging. It shows that this region has the demographics, and the ‘character,’ for lack of a better term, needed to inspire people to take a chance and make a large investment here.
And if these ventures succeed — and we have every reason to expect that they will — then they will likely prompt others to make similar investments. And if that happens, then this region, and Springfield in particular, will have more of that critical mass that will attract more young people, more empty nesters, more businesses, and more jobs. And this will prompt the construction of more market-rate housing that will help create an even more attractive demographic for businesses looking for a place to land or expand.
OK, three high-end hamburger restaurants are not going to do all that. But they can help. They can be part of the process of moving Springfield forward and closer to being the more vibrant city, the destination, that everyone wants it to become.
The burger battles are set to begin. Watch your cholesterol — please — and also watch and see if these new additions can help breathe more life into this area and, well, add some spice to the local economy.
We certainly hope they can.

Editorial

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Opinion
Brownfield Challenges and Opportunities

The compelling photographs on page 42 tell an intriguing story about the redevelopment of the sprawling former GE transformer-manufacturing complex in Pittsfield — and about brownfield redevelopment in general.
There are always three tenses involved with such projects, of course: the past, present, and future. The past is represented by images, stories, and recollections of what once was. In this case, and in most all cases, it’s about a large corporation that employed generations of people and brought economic vitality to a neighborhood, city, or region, and often gave it an identity. The present is usually represented by images of idle land where factories that employed thousands of people once stood.
The future? Well, that’s the hard part. The really hard part.
It’s often difficult to imagine what it can be — although people try mightily — and even more difficult to make reality. We’ve seen it repeatedly, at places like the former Uniroyal complex in Chicopee, the former Westinghouse site in Springfield (now one of many locations under consideration for a Western Mass. casino), the former Chapman Valve complex in Indian Orchard, and, to a lesser extent, the Ludlow Mills complex, now in the hands of Westmass Area Development Corp.
While there has been some encouraging progress with the Ludlow initiative — two projects, a new HealthSouth rehab hospital and some senior housing, were announced earlier this year — there have been mostly speculation and frustration involving the others.
That’s especially true in Chicopee, where the Uniroyal site has been a nightmare for mayoral administrations for more than 30 years, and Chapman Valve has been equally frustrating, with only a large solar-power array to be put in the category of new ‘development’ (there aren’t many jobs attached to solar farms).
Still, these brownfield sites are important to the region, and for many reasons. First, there will eventually be a severe shortage of developable land in Western Mass., although the ongoing sluggish economy has kept existing supplies virtually intact. This means that, to attract and retain companies and bring jobs to the area, brownfield sites like those listed above are a critical part of the region’s economic-development strategy.
Equally important is the fact that most of these sites are in urban areas, cities that were former manufacturing hubs and are now in the complicated process of trying to reinvent themselves as something else. These brownfield projects could provide a key piece to that puzzle.
We’re encouraged by what is happening in Pittsfield, and believe officials there are on the right track. The GE complex was indeed a center of innovation, and the transformers built there helped light up the world — literally. The Pittsfield Economic Development Authority, the entity created to redevelop the sprawling complex, has landed one tenant, a financial-services company, and is forwarding plans to build a life-sciences complex that will house companies that have moved beyond the startup stage and are looking for a place to grow.
As we’ve said many times, it is through the nurturing of small businesses such as these — rather than trying to lure large employers from other parts of the country or the world — that the region is most likely to secure more of those good-paying jobs that every community wants and needs. It may take more time to do it this way, but the results may well be more permanent.
It will take a long time — years, if not decades — to fill in the land left vacant when the GE buildings were torn down, and create a third picture to go with the two on page 42. The same is true in Chicopee and Indian Orchard, and it may likely be the same if a casino isn’t built in East Springfield on the Westinghouse site.
But with some patience, imagination, and, yes, the kind of innovation that made these sites so important to the region 50 and even 100 years ago, they can again be key contributors to the area’s economy.
And maybe give some of these cities a new identity.

Opinion

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Opinion
A Simple Remedy for a Wall Street Danger

Over the past several weeks, the financial community has paid rapt attention to trading losses at JPMorgan Chase, estimated to be anywhere from $2 billion to as much as $9 billion. The sudden emergence of such a large loss sent a disturbing tremor through an already-vulnerable economic landscape. The lesson to be learned here is emphatically not about the bank or its leadership, but about the structure of our financial system.
The loss by the much-admired bank was more than a case of a private-sector company taking a private-sector hit because of a private-sector error. First, if a bank this important were to become endangered, the contagion to global financial confidence would surely necessitate a bailout. Losses in institutions to which we entrust the soundness of our money, or where deposits are guaranteed, put the rest of us at risk. Second, and less widely appreciated, JPMorgan’s trading loss is a minuscule fraction of the bank’s more than $75 trillion in notional value of its current positions in derivative securities. The trading of derivatives — securities whose prices are dependent on valuations of underlying assets but do not represent direct ownership claims on those assets — is exempt from the sensible regulation of disclosure and leverage normally applied to stocks, bonds, and other direct claims. This is still, despite all recent attempts at financial reform, the Wild West of trading markets.
Banks say their trading positions are properly hedged by countervailing positions, leaving them little risk. They ‘prove’ this using statistical models anchored in past price behavior and by noting that market pricing indicates a proper balance between their opposing positions, leaving little residual exposure. The problem is that the models are oversimplifications. They rarely predict unfamiliar possibilities, sometimes called ‘black swans,’ or the impacts of external events such as geopolitical disruptions.
All three of the largest U.S. banks have open derivatives positions in excess of 24,000% of their equity capital. Neither models nor markets can protect them from small percentage imbalances. In addition, bank-trading relationships around the world are so interconnected that, if one goes down, all are threatened. No CEO or board of directors, however talented and honorable, can oversee trading at the multi-trillion-dollar scale with perspective and precision enough to assure the avoidance of systemic impairment. Nor can any government oversight body.
Bank lobbyists insist that all this trading is needed to facilitate commercial transactions, but don’t be fooled. The open derivatives positions at the three largest U.S. banks exceed twice the GNP of the world. Add in large European and Asian banks, and the commercial-hedging argument becomes a parody. Hedging is useful in commerce, but its systemic risk should never outweigh its commercial value.
Under present rules, banks are free to put us all at risk in derivatives trading without creating any offsetting cushion. Every derivatives transaction involves some basis risk (that two paired commodities will not continue to move in unison), some counterparty risk (that the trade will not be honored by the other party), and some human-error risk. Accountants and regulators know well that netting massive positions to zero cannot reflect true exposure.
Whenever a new position is taken, there should be a mandatory accompanying reserve or capital charge. This would have a twofold benefit. It would increase protection for both the public and the banks, and it would dull the appeal of hazardously oversized trading accounts. Although regulators should set the actual amounts, imagine that the charge was uniformly 0.1% of the notional position value. Open positions of $75 trillion in derivatives would require $75 billion put aside, an amount large enough to make that trading scale unappealing. Charges to match the risk created would bring trading volumes back to sensible size with a minimum of new regulations and no need to outlaw useful commercial practices. They would simply acknowledge that all derivatives positions, however useful, impose some risk on the holders and the public. Current scale imposes an unmanageable risk.

James M. Stone, former chairman of the Commodity Futures Trading Commission and commissioner of Insurance for Massachusetts, is CEO of the Plymouth Rock group of property and casualty insurance companies.

Editorial

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Opinion
Springfield Is Now Casino Central

Seemingly overnight — although it has actually been this way for months — Springfield has become ground zero in the ongoing and increasingly bizarre efforts to usher in the casino era in Massachusetts.
Indeed, while many of the initiatives are in their infancy stages — meaning there are no casino developers attached to them — there are now apparently at least three casino projects in the making in Springfield, and perhaps many more that are soon to be on the drawing board. Compare this to other regions of the state, specifically the eastern and southeastern areas, where there is little if any competition for casino licenses at this stage, and it’s clear that Springfield may well become the main battleground in perhaps the most important new business development in the Commonwealth in a generation — or two, or three.
And because the stakes are so enormous, there is, or should be, tremendous pressure on the city and its officials to get this right. And already there are signs that this is going to get very, very ugly, and potentially bad for the City of Homes.
But let’s back up a minute. Recent headlines have revealed the existence of what have become known in some circles as the “north” and “south” casino plans, reportedly being pieced together by brothers Peter (the north) and Paul Picknelly. The latter apparently involves aggregation of several parcels in the tornado-ravaged South End of the city, while the former involves property just off I-91 in the North End, including the sprawling Springfield Newspapers building. That’s an intriguing development that leaves the region’s largest media outlet unable to comment on perhaps the most important aspect of the casino issue (where to put one) and with a serious credibility issue when it comes to coverage of all aspects of this saga.
But that’s another story.
The real story in our view, is that because of the strong political support for casinos in Springfield, fueled in large part by the city’s continuing fiscal struggles and urgent need for jobs, and corresponding strong interest from developers, there is an apparently bitter battle brewing that has the potential to divide the community (people are already settling into various camps) and turn what could be a great opportunity into a situation where it might be difficult to tell who, if anyone, actually wins.
There is already speculation among some city leaders, including Chief Development Officer Kevin Kennedy, that intense competition for a casino license in Springfield will wind up benefiting the community. The theory goes that with so many suitors, the city can likely broker a better deal from any and all of the players. We hope they’re right, but so many rival plans may wind up creating a situation where people are working against one another to get what’s best for them, instead of working together, as they should be, to get what’s best for the community.
And in the meantime, all this focus on casinos is very likely to divert needed attention from the many other issues facing this city — from schools to poverty.
We’re not sure it’s possible — in fact, we’re quite sure it’s not possible — to get the city and its officials behind one casino plan and make a concerted effort to create a proposal that works for the community and could gain the favor of the Gaming Commission that will ultimately decide which projects earn licenses.
But that would be our hope, because despite projections to the contrary, we believe a long, protracted casino battle will likely hurt Springfield in the long run.

Opinion

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Opinion
Fueling the Next Wave of Biotech Growth

The staggering impact of the nationwide economic malaise has caused every state to examine what it can do to attract the industries that will drive sustainable growth over the long term. We were reminded once again of why the life-sciences industry in Massachusetts is the envy of states across the country — and why we can’t become complacent about it — when 15,000 biotech professionals from 65 countries descended on Boston for the BIO Convention last week.
The local economy has undergone a remarkable transformation in the past two decades, as industries that once dominated the local landscape have been reduced to a shell of what they once were, and newer, technology-driven industries have grown to fill the void. The life-sciences industry has experienced unprecedented growth during that time, buoyed by a unique combination of local assets, including world-class universities and hospitals; substantial federal funding for research; a strong, local venture-capital community that understands the vagaries of our industry; and, more recently, the active involvement and support of the Commonwealth.
Employment at Massachusetts biotechnology companies has grown more than 50 percent over the past decade, to nearly 50,000, and even managed to grow during the depths of recession from 2007 to 2010. The average salary of a biotech worker is more than $95,000, substantially higher than the estimated state average salary of approximately $54,000. And with construction cranes looming not just over Cambridge and the Boston waterfront, but also reaching well out into the suburbs, Central Mass., and the South Coast, it is clear that investment and optimism in the future of the industry in Massachusetts remain strong.
But it was evident at the convention how dangerous it would be to become complacent. Other states and countries were there competing to lure away our state’s biotech companies and talent. They have many tactics at their disposal, including strong financial incentives, tax breaks, lower labor costs, and, in some cases, a fairly convincing argument about quality-of-life benefits outside of our state.
I experienced this first-hand as CEO of Organogenesis Inc., a biotechnology company based in Canton that has successfully developed two regenerative medicine products that use human cells to stimulate the body’s natural ability to repair and regenerate itself.
When we began planning five years ago to expand our operations, our top choice was Massachusetts. But when other states offered us incentive packages that topped what was initially offered here, we couldn’t help but listen. When we were offered a package of incentives that would potentially make us more competitive and more sustainable, we were set to leave the state and expand elsewhere.
A lot has changed since that time, for Organogenesis and for Massachusetts. We are now in the midst of a major, multi-year expansion that will more than triple the size of our presence in Canton, to more than 300,000 square feet. Our global headquarters, R&D, and manufacturing facilities will remain in Massachusetts. The decision to remain and grow here was driven primarily by incentives provided by the state under its 10-year, $1 billion Life Sciences Initiative, signed into law in 2008. Massachusetts has provided us with grants, low-interest loans, and a competitive tax rate, and we in turn have invested five times that amount to build our new facilities. We are delivering on the pledge to create hundreds of new jobs in the years ahead.
The state’s investment in the future of Organogenesis made a critical difference at a crucial time in our history. Dozens of Massachusetts companies are wrestling with the same questions about long-term growth and sustainability. The competitive race for growing industries like ours will only get tougher.
With all that has been done to make Massachusetts a more attractive magnet for biotechnology, we will constantly be challenged to stay one step ahead of the competition.

Geoff MacKay is president and CEO of Organogenesis Inc., and chairman of the MassBio board of directors.

Editorial

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Opinion
No One Said This Was Going to Be Easy

The casino era in Massachusetts is only seven months old, but we wouldn’t blame anyone if they thought it was closer to seven years. It certainly seems that way.

Indeed, since passage of the legislation approving Las Vegas-style gambling last November, after years of debate and near misses, things have proceeded in slow motion, according to many observers, who, citing many apparent missteps and controversies, predict only more of the same for the immediate future.

Experts and media representatives assessing what’s happened thus far — including everything from questions about a conflict of interest involving local Gaming Commission member Bruce Stebbins (a former Springfield economic-development administrator) to the embarrassing resignation of interim Executive Director Stanley McGee only three days after he was hired — have used the phrase ‘rocky start’ early and often.

And while they’re right to some extent — the Gaming Commission has often looked the gang that couldn’t shoot straight — should we have expected anything else? This is a huge, complex industry Massachusetts is entering, where the stakes are enormous and the scrutiny is intense.

Gaming Commission Chairman Stephen Crosby might have been glossing things over when he recently told the Boston Globe, “I think it’s gone really well,” in reference to the start of the casino era, but in some respects he’s not far off base. Anyone who expected a smooth, fast ride was not thinking realistically. Crosby hit the nail on the head, actually, when he also told the Globe, “we have to learn to be comfortable with the fact that controversy is inevitable.”

And for evidence of that fact, one need look no further than the rebuke — that’s the only word to describe it — administered to Crosby by state Rep. Joseph Wagner, a Chicopee Democrat and key player in the fashioning of the casino bill last year, after Crosby put forth comments that simply suggested that the commission might license fewer than three casinos and a slots parlor.

The legislation that Wagner helped draft clearly states “up to three” casinos and a slots parlor, but he looked between the lines at Crosby’s comments and reasoned that, if only two casinos were licensed, then it would be the Western Mass. license that would be most in jeopardy, and he was right to come to that conclusion. And he quickly called out Crosby for saying the commission would do essentially what it was empowered to do — look at all the data and make decisions that make the most sense for everyone in the Commonwealth.

This is the way it’s going to be for the next two years, or however long it’s going to take the Gaming Commission to do its analysis and render its decisions. Every word, every step, every bit of conjecture is going to be scrutinized, analyzed, and probably overanalyzed.

And in many ways, all that is good because, despite the urgent need for jobs and revenue in this state — those are the reasons why this measure was passed in the first place — the goal here is not to get this job done fast, but to get it done right, with the understanding that ‘right’ is most certainly a relative term and there will never be agreement on what that actually means, and that’s part of what makes this compelling and maddening.

The rocky, bumpy start for the casino era — if those terms are even appropriate — has certainly been eye-opening. As if there were any doubt, we have been reminded that there is probably nothing that is going to come quickly or easily in the process of bring casino gaming to Massachusetts.

As Crosby said, we all have to get comfortable with the fact that controversy is inevitable — and unavoidable.

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Opinion
The Education State, for Now

For many years, Massachusetts has enjoyed the unofficial title of the Education State. It is the mecca of American higher education with more than 50 universities and colleges in the Boston area alone. Bay State K-12 students rank first in national reading and mathematics test scores. High-school graduation rates may not be best in the country, but with four in five freshmen receiving diplomas within four years, it is toward the head of the class and well above the national average.
The rankings, however, do not tell the whole story. Although Massachusetts ranks first on the National Assessment of Educational Progress, half of the Commonwealth’s fourth graders scored below proficient in reading. Massachusetts also has a large achievement gap. One key to a happy ending is to support preschoolers and early education. Yet according to a landmark national study released recently by the National Institute for Early Education Research, Massachusetts continues to struggle in maintaining its commitment to state funding for high-quality pre-kindergarten. In the long run, this could threaten Massachusetts’s status as the Education State and its accompanying benefits as the achievement gap becomes insurmountable and costly.
The National Institute for Early Education Research’s 2011 report on the state of preschools ranked the state 23rd in funding for pre-kindergarten, compared to eighth a decade ago. It also trailed 27 other states in research-based quality standards, achieving only six of 10. The Universal Pre-Kindergarten grant program, which is designed to support and enhance quality, is currently funded at $7.5 million, down from $12.14 million in fiscal year 2009. The state currently contributes $7.5 million to Head Start, down from $10 million in fiscal 2009. The Department of Early Education and Care is currently funded at $495.16 million, down from $570.58 million in fiscal 2009. The institute’s calculations find a precipitous drop in dollars spent per pre-K child of nearly 45% over the past decade, and there has been little progress in enrolling more children in quality pre-K programs at a time when the need is escalating. These results are surprising for a state priding itself on its education system.
Massachusetts was one of nine states to win a federal Race to the Top Early Learning Challenge grant, a $50 million infusion to the state over the next four years. The award shows that the ideas and desire to keep young children in the forefront of education reform are present, even if the state’s allocation of resources is lacking.
Over the next four years, plans are to strengthen early education in Massachusetts by addressing quality, standards and assessment, family engagement, workforce development, data systems, and children’s mental health.
Unfortunately, Early Learning Challenge grant funds will not last. Neither are they to be used to supplant state investments. To build on the momentum created by the Early Learning Challenge, Massachusetts must increase investments in high-quality early education. Science and economics both confirm the benefits of investing in quality early education. An overwhelming body of research shows that high-quality pre-K prepares children to succeed in school, enroll in college or career training, and ultimately get better jobs in the increasingly competitive global economy.
For Massachusetts to retain its perceived advantage as the nation’s Education State, with the ensuing benefits of that title, policymakers need to change course and make prudent new investments in early education now.

Jim Squires is senior research fellow at the National Institute for Early Education Research.

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Opinion
Rebuilding a Stronger Springfield

We all will remember where we were on June 1, 2011. Without a great deal of warning, an EF-3 tornado with winds of more than 160 miles per hour descended from the sky and tore a 6.2-mile path through Springfield, leaving behind a trail of damage unprecedented in the city’s history.
This devastation immediately impacted 40% of city residents and resulted in more than 350 city residents having to live in temporary shelter at the MassMutual Center, over 600 structures damaged, and 150,000 cubic yards of tree debris to be cleared from public ways.
While that was a truly historic event, what happened following the tornado was equally as significant. Neighbors helping neighbors, businesses helping businesses, our first responders and those assisting us from across the state, city employees and our federal and state partners responding in a swift and compassionate fashion demonstrated the true character of our city.
As we approach the one-year anniversary, we look back at what has been accomplished since that day. Beyond the crucial 24/7 emergency response that happened in the days and weeks after the tornado — homeless families being re-housed, streets being cleared and reopened, power being restored in 72 hours — it was clear that the community was going to need to work together on a plan to rebuild Springfield, and not just rebuild what was lost, but rebuild a stronger Springfield.
It was important to me that our entire community be represented in this process, and with that, the partnership of the Springfield Redevelopment Authority and DevelopSpringfield was established to help lead the process, truly making this a public-private partnership. To further ensure participation, the Rebuild Springfield Advisory Committee was formed, comprised of representatives from a wide spectrum of impacted residents, businesses, and organizations interested in the rebuild phase.
What followed was a phased planning process in each of the neighborhoods affected by the tornado, a process that, when completed, involved the participation of more than 3,000 city residents — the largest community planning process in the city’s history. It was inspiring to see the numbers of people taking time out of their days to come and bring their concerns, ideas, and input on how to make Springfield a better place.
And this didn’t mean the rebuilding was on hold. We saw people in their own lives rebuilding and doing it bigger and better. Since June 1, 2011, we’ve seen more than $22.5 million worth of rebuilding in the tornado-impacted areas. People are reinvesting in their community, and see the opportunity we have in Springfield. We saw more than 80 businesses that had either short-term closures due to power loss or long term disruption due to damage, rebuild, reopen, and our community has come back to support them. The city rebuilt and reopened while still planning for its future.
So we now have the completion of a grassroots plan — available at www.developspringfield.com — that does not sit on a shelf. Rather it becomes a living document, one that is led by our domain and district Leaders through DevelopSpringfield for implementation, including the hundreds of volunteers who indicated they wanted to be part of the implementation on a whole host of topics.
I couldn’t be more thankful for our business community through the recovery and planning process. Knowing the quality of our companies in Springfield, I know we can fully expect a similar wave of support as we enter into the important phase of implementation and rebuilding.
Institutions like MassMutual — which not only donated significant staff time to the process and emergency response resources, but also made a generous $1.6 million contribution toward rebuilding our city — have been nothing short of heroic.
Experiencing a tornado here at home is something we in Springfield never expected would have happened, but the silver lining in what has happened since that day, the work the community has done in helping each other and in planning for our future, has been truly inspiring.
The city will continue the rebuilding process in an effective, constructive, and compassionate manner and will fight tooth and nail to ensure we received every reimbursable dime that we are entitled to.

Domenic Sarno is mayor of Springfield.

Editorial

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Opinion
Time to Put Young People to Work

It’s never been easy for young people to find summer employment, especially low-income youths from urban areas. It’s seemingly always been a case of too much competition and too few opportunities.
And this year, it appears that things will get even worse. Indeed, a recent study conducted by the Center for Labor Market Studies shows that this will likely be the most difficult year in the past two decades for young people to secure summer employment. And it is that dire prediction that led Bill Ward, president and CEO of the Regional Employment Board of Hampden County, to note that it will take a concerted effort of the private sector, working in partnership with local, state, and federal government, to secure something approaching adequate numbers of summer jobs.
He made that assessment at the recent launch of the REB’s annual YouthWorks summer jobs program, where he was joined at the podium by the mayors of Springfield and Holyoke, as well as other area leaders, all of whom made the case for employers and municipalities to be bold and creative and find ways to create summer job opportunities.
We hope the collective messages resonate, because, as we’ve stated on many occasions over the years, summer jobs (which are often first jobs for those fortunate enough to get one) are an important part of the overall learning process for young people, as well as another vehicle for building a solid workforce for the future.
In short, they’re very important for the continued growth and prosperity of the region.
Employers in both the public and private sectors understand this, but many are facing enormous challenges of their own. While the Great Recession is being talked about mostly in the past tense, there is lingering hardship, not to mention large amounts of doubt about whether the state’s economy will continue to rebound, and, if so, to what extent.
In this climate, it’s easy to see why employers would be cautious about adding any help — even a teenager making $8 per hour, 20 hours per week. In this environment, it would be easy for employers to say ‘no, not this year’ when it comes to expanding their payrolls.
We’re hoping that they can do what’s more difficult and say ‘yes,’ thus giving a young person a tremendous opportunity that they will long remember.
Summer jobs, especially first jobs, do many things. First, they can help take young people off the streets and perhaps keep them out of trouble at a critical juncture in their lives. They can also put a little money in their pockets and their bank accounts, and thus introduce them to the concepts of earning an income and, hopefully, proper money management.
But, perhaps more importantly, such jobs introduce people to the world of work. They can learn about what to wear, how to work with the public, what it’s like to have people count on you, and, if conditions are right, what it’s like to be part of a team.
What’s more, in some cases, summer jobs can open young people’s eyes to career possibilities and introduce them to companies they may want to work for years down the road.
Add it all up, and it’s evident that mostly good things happen when businesses consider young people to fulfill their summer hiring needs. It is our hope that companies across many sectors will heed the call and make this a summer to earn and learn for area young people.

Editorial

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Opinion
The Vast Power of Mentoring

The many benefits of mentoring have long been understood by those who partake in that important practice. Any time adults can use their knowledge, experience, and compassion to help guide young people through the challenges they’re facing — and will encounter in the years to come — good things usually happen.
But MassMutual is taking this time-honored tradition a big step further with a new and somewhat unique mentoring model that we believe has vast potential to become a blueprint for other companies to follow, as well as a method for keeping more of this region’s young talent in the 413 area code.
As explained in the story beginning on page 6, this model, part of the company’s broad Career Pathways program, takes a traditional mentoring initiative and adds an important career element to it. The initiative pairs young people from high schools literally across the street from MassMutual with successful professionals who can provide needed assistance with challenges ranging from the SATs to nailing an interview for a part-time summer job. Moreover, it introduces them one of the region’s largest employers — and a host of career opportunities.
The philosophy behind this program is fairly simple, but the implications are far-reaching. MassMutual employees donate their time, energy, and experience to the task of keeping talented young people on the right path through the challenging last three years of high school, and, in doing so, they are possibly grooming employees for the immediate future, a time when companies large and small will face the daunting task of replacing retiring Baby Boomers.
It looks good on paper — even if it’s not officially down on paper yet — and we’re confident it will look good in reality, although we really won’t know that for some time.
For now, all the signs are quite positive, and it appears that MassMutual has fashioned a program — carried out in conjunction with Big Brothers Big Sisters and the Springfield School System — that will likely have many long-term benefits for the company and the region as a whole. This is an initiative worth emulating for those who have the resources and inclination to do so.
Start with the mentoring component. As we said at the top, this is an all-important exercise in this region, especially in urban centers where young people may not have many — or any — adults in their lives who act as effective role models and push them to reach higher, graduate from high school, and attend college. Many companies in this region encourage their employees to act as mentors and provide them with the time and flexibility needed to carry out those duties, and we applaud them for their efforts.
The MassMutual model adds a career-development component that could be of great benefit to this region at a time when we keep hearing two phrases — ‘skills gap’ and ‘brain drain.’ The first is used by companies that are having a difficult time finding qualified employees to fill open positions, and the second is used by economic-development leaders as they lament the number of area college graduates who leave this area to pursue a career in their chosen field.
Through this kind of career-pathways mentoring, employers can introduce young people to their companies and future jobs, motivate them to do the hard work that’s needed to attain those careers, and perhaps help build a workforce for the future.
MassMutual’s mentoring program recently won an award from the Mass. Mentoring Partnership for its success — and its vast potential. If all goes as expected, there will be even greater rewards down the line.

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Opinion
Crowdfunding Could Spur Startups

The Great Depression led to the adoption of a series of laws designed to prevent individual investors from being fleeced by unscrupulous and fraudulent ‘businessmen.’ These laws provided the framework of securities laws that have been navigated by countless entrepreneurs since the 1930s seeking legitimate investment in their fledgling businesses. Conversely, the Great Recession has pushed Congress to adopt the Jumpstart Our Business Startups (JOBS) Act, signed into law by President Obama on April 5, which fundamentally changes the rules of the investment game for businesses of all sizes.
Perhaps the most significant change is allowing startups to use ‘crowdfunding” to raise capital. There is significant potential for a flourishing of startups as this new flavor of capital comes online. There is also the opportunity for regular Americans to get the same opportunity angel investors have had for decades — the small chance to make a lot of money and a much larger chance of losing every penny — investing in startups.
Crowdfunding is the modernization of an old process — raising small amounts of money from a large number of people — using the power and scope of the Internet. Crowdfunding via the Internet already exists in many different forms. Independent journalists fund investigative journalism not funded by the mainstream media via Spot.us; Kickstarter.com allows inventors and artists to raise funding directly from (and sell to) people passionate about the product; and Kiva.org assists developing-world entrepreneurs to connect directly to individual philanthropists to secure microloans.
Here’s how it usually works. Entrepreneurs create a ‘pitch’ profile on a crowdfunding Web site. The crowdfunding site reviews the profile to be sure it is appropriate and not fraudulent (with varying levels of success). The crowdfunding sites have an incentive to list only honest, worthy companies — otherwise, the ‘crowd’ will migrate to an alternate crowdfunding Web site. If the application is approved, the entrepreneurs use social media to promote their pitch to communities of people likely to be receptive to the idea. People who take interest review the profile, often engage in an online discussion with the entrepreneurs, and may make a financial contribution through the crowdfunding site.
The SEC will be finalizing the rules and restrictions on crowdfunding over the next 270 days; however, the JOBS Act already contains significant limitations on both the investor and the company seeking investments through crowdfunding. Companies can raise only $1 million every 12 months through crowdfunding (however, these companies still can — and many will — raise additional funds pursuant to the current, more traditional private-placement rules). Depending on the predefined target that the company establishes for its fund-raising round, the company will need to prepare detailed financial statements (audited if the target is more than $500,000) and deliver these to any prospective investor. The company must also provide both the SEC and prospective investors indepth information about the company and the offering, including the company’s business plan, the risks of the investment, and information about the officers, directors, or managers of the company.
Although any American can participate in crowdfunding as an investor, each crowdfunder will be able to invest only a limited percentage of their annual income (5% for individuals with income under $100,000, 10% for those over this threshold) in any 12-month period. Additionally, the equity that these crowdfunders receive will be restricted stock — it cannot be transferred for 12 months, with few exceptions.
The legalization of crowdfunding will also lead to the launch of a new kind of company — the fund-raising portal — as any company raising funds through crowdfunding must use these portals to act as the conduit between the company and the investors. These portals will exist only on the Internet — there will be no bricks-and-mortar storefront for these portals. The portal will need to register with the SEC and take reasonable steps to ensure that all participating in crowdfunding have followed all of the SEC’s rules — essentially the SEC will be ‘deputizing’ the portals to enforce the SEC’s rules. Companies using a portal should expect to pay 6% to 10% of the total funds raised as a service fee.
Congress and the president hope crowdfunding will lead to more startups obtaining critical funding early in their development, which should lead to more small businesses getting off the ground. However, the individuals investing in these early-stage companies need to be aware of the risks of these investments and remember the golden rule of investing: “if it sounds too good to be true, it probably is.”

Attorney Scott Foster, Esq. and Paul Silva are co-founders of Valley Venture Mentors.

Editorial

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Opinion
40 Reasons to Feel Good About the Future

When BusinessWest started its 40 Under Forty Program just over five years ago, there were expectations — and also some trepidation.
We knew we could identify some rising stars in the region’s business, nonprofit, and entrepreneurship realms, but there were always whispers — and sometimes loud doubts — about just how deep the talent pool was.
As we introduce the sixth class of 40 Under Forty winners, it’s clear that the pool is quite deep — and also very inspiring. For those looking for positive signs that this region will have the young leadership it will need to grow and take on the many challenges facing municipalities in this global, information-based economy, the profiles beginning on page A6 should provide them.
Each of these stories is unique, but there are many common denominators, especially the twin desires to excel and make a difference in the community. Here are just a few examples:
• Carla Cosenzi, the high scorer among the more then 100 nominees. In business, she and her brother, Thomas, are not only continuing the legacy established by their father in the automobile industry, but they’re building upon it with the addition of a Volkswagen dealership in Northampton. In the community, she’s continuing another tradition — the Thomas E. Cosenzi Driving for the Cure charity golf tournament (named after her father, who succumbed to cancer several years ago), which has to date raised more than $200,000 in support of brain-cancer research;
• Ben Einstein, the serial entrepreneur who is devoting considerable time and energy to the cause of helping others get businesses off the ground and to the next level though his involvement with the Idea Mill conference, which is likely to become an annual event in this region;
• Eric Hall, the Westfield police sergeant who became the first law-enforcement officer to join a 40 Under Forty class. His passions are fighting and preventing crime, and helping young people make smart choices. He can often be seen sharing lunch with elementary-school students, and is now chairman of the board at the city’s YMCA;
• Jason Tsitso, who has helped R&R Windows battle back from the rough patch resulting from the Great Recession and its crippling impact on the construction sector. In the community, he took his passion for bicycling and channeled it into a fun — and highly successful — fund-raiser for Habitat for Humanity called Trails for Nails.
• State Sen. James Welch, one of the few public-sector leaders to become a 40 Under Forty winner. He has mastered the art and science of constituent service, especially in the wake of the June 1 tornado, the path of which closely approximates the district he represents.
• Sheila Moreau, who, with her mother, has helped shape MindWing Concepts into one of the more intriguing entrepreneurial success stories in recent years. What’s more, she’s making good on a commitment to serve the community in a number of ways, especially as a volunteer with the Holyoke St. Patrick’s Day parade. She even sings the national anthem at sporting events and community gatherings.
The other 34 stories are equally compelling, but these are representative of this year’s class. You won’t find the word in every profile, but the trait these young men and women share is passion — to achieve excellence, to innovate, to help others within our community, and, most importantly, to lead.
After reading these stories, you should feel at least a little better about the future of this region. Thanks to them, it looks very bright.

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Opinion
Sending a Mixed Message on Jobs

There are more mixed signals from the Obama administration on jobs: a craven capitulation on regulation in the name of job creation, and a surprisingly good speech by a top official on the importance of American manufacturing.
President Barack Obama will shortly sign the so-called bipartisan JOBS Act. The law is neither bipartisan nor about creating jobs. It exempts an estimated 80% of new publicly traded corporations from the Securities and Exchange Commission’s (SEC) usual disclosure requirements for up to five years after their initial public offering (IPO). 
The law was promoted by investment bankers, venture-capital firms, and the Republican leadership, who were all alarmed that IPOs (not surprisingly) have declined in today’s distressed economy. The remedy? Gut investor protections, the better to promote new stocks. 
The premise is that, by facilitating new stock offerings, the law will create jobs. Mainly, it will create jobs for one set of lawyers working to exploit the loopholes and another representing ripped-off investors. 
The law is ‘bipartisan’ only to the extent that the administration, despite the opposition of SEC Chair Mary Schapiro, didn’t have the nerve to oppose it. This is what today’s bipartisanship looks like — take-no-prisoners Republicans intimidating Wall Street-oriented Democrats.
That’s the bad news. The good news is a terrific, little-noticed speech by the administration’s chief economic official, Gene Sperling, who heads the president’s National Economic Council. In the speech, delivered recently at the National Press Club to a conference on the renaissance of American manufacturing, Sperling made arguments that are standard in circles to the administration’s left, but are rarely embraced by centrist Democrats. “We do believe that, even if today only 12% of the U.S. private-sector workforce is employed in manufacturing, it is a sector that punches above its weight,” he said, “when you take into account the outsized role that manufacturing plays in innovation through R&D investment and patents, the tight linkage between innovation and manufacturing production, the higher-wage jobs it produces, its importance for exports, the spillover benefits that manufacturing facilities have on firms and communities around them, and the deeper economic harm that comes from allowing our manufacturing production capacity to be hollowed out.”
Well-put. Citing a number of studies that justify these conclusions, Sperling added, “more than any other industry, manufacturing firms account for a disproportionate share of innovative activity in the U.S. — 70% of private-sector R&D and over 90% of patents issued. As a country, it matters where these benefits occur.”
So what, exactly, is the administration doing to promote U.S. manufacturing, big time?
Well, Sperling touted the few billion dollars the administration has spent on advanced-manufacturing initiatives, its support for clean energy and related technologies, its efforts to give manufacturing firms tax breaks, its proposal for an $8 billion Community to Career Fund to train workers for high-skill manufacturing jobs, and recent complaints against China’s protectionism when it comes to export of ‘rare earths.’ The Administration also plans a new Interagency Trade Enforcement Center (to do what the office of the U.S. trade representative should have been doing all along.)
It’s a start, and an excellent case for a bolder industrial policy and a much tougher trade strategy against foreign mercantilism — neither of which the White House is pursuing. For the most part, our trade policy is on auto-pilot, promoting ‘free-trade’ deals that turn a blind eye to foreign subsidies and promote outsourcing of U.S. manufacturing jobs. The administration’s late manufacturing czar, Ron Bloom, got no staff and was not permitted to utter the words ‘industrial’ and ‘policy’ in the same sentence.
The challenge for Sperling is to persuade his boss to turn the welcome words of this fine speech into national policy. And to stop backing totally phony Republican ‘jobs’ measures like the JOBS Act.

Robert Kuttner is co-founder and co-editor of the American Prospect.

Editorial

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Opinion
Maintaining Momentum at UMass Amherst

There were no real surprises at the elaborate press conference staged last week to introduce Kumble Subbaswamy as the chancellor-elect at UMass Amherst (see story, page 10).
The current provost at the University of Kentucky, due to assume his new post in July, said all the things that one would anticipate him saying — about taking the flagship campus to the proverbial next level, improving town-gown relations, maintaining and possibly expanding the school’s work within Greater Springfield, and striving to improve access to the university. In the course of doing all that, he used the words you would expect him to use: challenge, opportunity, relationships, partnerships, collaboration, communication, and transparency.
But he also used a word that some might not expect to hear — momentum. And he used it early and often, in phrases like ‘maintaining momentum,’ ‘building on the existing momentum,’ and others like it. And he was right to do so.
In the wake of what amounts to the ouster of Chancellor Robert Holub, it would be easy to forget or overlook the existence of a good deal of momentum at the flagship campus of the state university. Subbaswamy was wise to acknowledge it, and, more importantly, he understands that one of his primary goals is to sustain the current momentum, and in the many forms it takes.
In recent years, UMass has made great strides in its efforts to win more federal research dollars, and also in the broad and all-important category of fund-raising. Meanwhile, the many cranes operating on campus are a compelling sign of expansion and modernization.
But perhaps the most impressive gains, we feel, have come in the realm of economic development, or making the Amherst campus much more the ‘economic engine’ that area business and civic leaders have long desired — and expected — it to become.
Indeed, for years the phrase heard in the Greater Springfield area was, ‘why isn’t UMass doing more?’ And you heard it in reference to everything from a physical presence in downtown Springfield to job creation; from putting the vast resources at the Amherst campus to work helping individual businesses and economic sectors grow and thrive, to efforts to enable more area residents to attain four-year degrees. Even the football team’s ascension to the bowl subdivision connotes upward movement.
The fact that you don’t hear that phrase nearly as often indicates that the school has become far more involved in those initiatives and has created a good deal of that aforementioned momentum.
Examples abound, and include:
• Expansion efforts at the Pioneer Valley Life Sciences Institute, a collaborative effort with Baystate Health;
• The university’s lead role in making the Green High Performance Computing Center a reality in downtown Holyoke, where it is generating enthusiasm about bringing related businesses to that city;
• A project to move the university’s Design Center into one of the buildings in Springfield’s Court Square;
• The Precision Manufacturing Regional Alliance Project, or PMRAP, as it’s known, a project being undertaken with the Regional Employment Board of Hampden County and the National Tooling & Machining Assoc. to transfer technology from two departments at the university (Polymer Science and Mechanical and Industrial Engineering) to area precision manufacturers; and
• An ongoing partnership with Springfield Technical Community College to reinvigorate the Scibelli Enterprise Center on the STCC campus and, in so doing, help more fledging business ventures get off the ground or to that next level.
Together, these initiatives and many others add up to progress and (here’s that word again) momentum, not only for the university, but for the region and especially its largest city.
Subbaswamy told the press that there are many aspects to his job description as chancellor — everything from promoting the university and strengthening its brand to making sure a host of constituencies, from lawmakers to alumni, understand its true value to the Commonwealth.
But he can put ‘maintaining momentum’ at the very top of his list, and, judging from his comments, he already has.

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Opinion
How to Reform Community Colleges

The current debate about the future of community colleges is nothing new. Their mission has always been contested.
Some see these open-admission, relatively inexpensive colleges as providing technical training focused on local workforce needs. Others say they provide the first two years of a baccalaureate degree and facilitate transfer to a four-year college or university. Still others see community colleges as providing a variety of non-credit courses and support for students needing to obtain a high-school equivalency degree, or simply advancing their personal or professional interests.
Some — including the Boston Foundation, whose report on community colleges seems to have been the model for the Patrick administration’s recent proposal — think the multiple missions of community colleges are a sign of confusion and inefficiency. Actually, they are the sign that they are doing their jobs.
Community colleges must continue to play their three roles. The question is simply one of balance. But the governor’s recent proposal would tilt the scale the other way, making community colleges little more than publicly funded workforce-training centers for private business. This is as bad for the Commonwealth as it is for community-college students.
A bachelor’s degree not only provides access to higher-paying jobs, but also emphasizes the broad liberal-arts education crucial to helping students deal with living in an increasingly complex global society. Community colleges must continue to play their transfer role while still providing access to immediate career programs. The governor’s emphasis on workplace education short-circuits the many students who aspire to a higher education. Furthermore, it effectively constitutes a tracking system for minority and working-class students, who are concentrated in community colleges.
Rather than throw out the invaluable, multiple missions of community colleges, how about some real reform?
First, we must create a foundation budget for each community college; all are woefully underfunded. Community colleges have traditionally had far less funding than the state universities, and have been hit especially hard by a decade of disinvestment. They do not generally have the capacity to do major fund-raising, recruit higher-paying out-of-state students, or charge the high fees that the UMass institutions do. A starting point would be to raise all community colleges’ budgets up to that of the college with the highest per-student budget.
Second, just as in K-12 education, the most important factor in the quality of education is the faculty hired to teach and do research. This is especially true for community colleges that consistently teach the most racially and ethnically diverse student body in the public higher-education system. This sector of our system deserves to have well-compensated faculty and staff. And yet, the situation is upside down.
Third, community colleges serve huge numbers of students, with a range of needs and interests. The need for support staff — in admissions, mentoring, advising, tutoring, financial aid, counseling, and libraries — is greater than ever. It is precisely these crucial positions that have been eliminated. Staff positions should be hired in proportion to admitting new students and hiring more faculty.
Finally, we must improve the affordability of community colleges so that students can afford to matriculate and are not strapped with debt upon graduation. The explosion of student debt threatens the role public higher education plays in providing a pathway into the middle class. We have to move beyond the ‘high tuition and high aid’ model that Massachusetts has unsuccessfully employed: as tuition and fees have skyrocketed, the state has failed to put money on the aid side of the equation, such that now the average state financial-aid grant covers less than 10% of the total cost of attending a state college.
One of the buzzwords of our politics today is ‘accountability.’ Before asking public colleges and universities, their students, faculty, and staff to do more counting, measuring, and testing, government leaders should be held accountable and provide adequate funding for our institutions to do their jobs. v

Max Page is a professor of Architecture at UMass Amherst and vice president of the Public Higher Education Network of Massachusetts.

Editorial

By
Opinion
Continuing the Search for Answers

State Rep. Jim McGovern hit the nail on the head — repeatedly.
In his comments to attendees at a recent symposium titled “Digital Games: Playing in the Valley” (see story, page 17), he said that few industries “can project the growth characteristics of the game industry.” And he’s right. He then said that, to get the regional economy back on its feet, video games comprise “one of the answers.” Right again.
And notice the use of the plural, because it’s important.
Indeed, there are still many people in this region looking for the answer, or the next big thing. After decades of searching, one would think that they would know by now that there isn’t one answer to this region’s problems when it comes to vibrancy, job creation, and overall reinvention from its days as a manufacturing hub. And there won’t be one big thing, either.
It must be many things, or many answers. Which brings us back to the symposium at Hampshire College earlier this month. It was there that speaker after speaker — from college professors to elected officials like McGovern to people like Allan Blair, president of the Western Mass. Economic Development Council — talked about how this region could be a hub for video-game-related businesses, and how it should be.
Not all, but most of the active ingredients are there to make this happen, the various speakers said, listing everything from cost of living to a critical mass of young college students, to a quality of life sought by the younger generations. The challenge, they said, is to foster this young, still-growing industry, and to overcome the hurdles, such as the lack of a solid reputation in this industry and also the incomprehensible lack of high-speed Internet access in some of the more remote but still-desirable areas of this region.
The day’s events and speeches could be summed up as a call to action, an effort to raise awareness when it comes to the job potential of a still-misunderstood subsector of the economy, and an attempt to rally the necessary support to convert something that most consider a longshot into something doable.
We need more events like this in Western Mass. because we need to tap a number of wells when it comes to innovation and job creation, in fields like video games, green energy, the biosciences, medical-instrument manufacturing, and more.
The first step is to acknowledge and understand the full potential of some of these emerging industries or clusters — and many speakers admitted that they hadn’t previously had such an appreciation of the video-game sector — and then to be carefully aggressive in creating an environment in which such ventures can thrive.
‘Carefully aggressive’ might sound like an oxymoron, but it’s not. Cities, regions, and states must indeed be aggressive when it comes to supporting potential jobs — Rhode Island was when it gave former Red Sox pitcher Curt Schilling’s video-game business, 38 Studios, a $75 million loan to get to the next level in the Ocean State — but they must also be prudent. Massachusetts learned the lesson the hard way when it gave huge incentives to Evergreen Solar, not understanding that market forces would soon drive production of such systems overseas.
No one could have imagined 30 years ago that video games would be a course of study in college and a source of many thousands of jobs worldwide. Likewise, no one knows what we’ll be saying these same things about 30 years from now.
What we do know is that the region must be diligent in its search for answers — in the plural — because it will take many of them to create the solid jobs our communities will need moving forward.