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Community Spotlight

By Mark Morris

New Northampton Mayor Gina-Louise Sciarra

New Northampton Mayor Gina-Louise Sciarra says a redesign of Main Street is one of the city’s key issues moving forward.

 

As 2022 begins, Gina-Louise Sciarra starts the new year as Northampton’s new mayor. As she settles into the job, the city faces big opportunities and challenges, especially the constant challenge of managing COVID-19 and its variants. Even as the pandemic adapts, Sciarra said she’s confident the workers and businesses in Northampton will also adapt and keep moving forward.

“We have to help our businesses through this really difficult time and figure out what the next stage of our economy is going to look like,” Sciarra said. “We have a special downtown that we want to stay vibrant and keep it the popular destination it’s always been.”

One of the largest projects on the mayor’s agenda involves a redesign of Main Street. Northampton has a uniquely wide main artery, which Sciarra said is lovely in some ways, but it also presents safety issues.

“We’re going to make it safer for pedestrians and bicyclists, as well as create more green space,” she said. “The redesign will help us meet the next era of retail and commerce while keeping it a place people want to come and experience.”

Not surprisingly, the Main Street redesign has been a huge topic of conversation among downtown businesses, according to Amy Cahillane, executive director of the Downtown Northampton Assoc. (DNA). Cahillane said some of her members favor keeping the wide Main Street and making crosswalks safer, while others would like to see the street narrowed, allowing for wider sidewalks.

“I don’t think there will be a design that makes everyone happy,” Cahillane said. “At the same time, it’s important for all to understand the magnitude of impact that construction will have on downtown businesses.”

She added that she’s eager to find out if the city will support businesses during the redesign because, after two years of reduced income due to COVID, they will soon face a construction process that also hurts the bottom line.

“We’re going to make it safer for pedestrians and bicyclists, as well as create more green space. The redesign will help us meet the next era of retail and commerce while keeping it a place people want to come and experience.”

“I don’t think it can be publicized enough what the construction will look like and how to navigate downtown while businesses are open,” Cahillane said. “I would also like to see financial support for businesses after all they’ve had to endure.”

After years of community input on the project, Sciarra said Northampton is in line to receive nearly 25% from the state for the Main Street redesign project, and that’s enough to keep it moving toward a construction start in 2025.

“Because of the size of this project, we will also modernize the underground infrastructure during the construction period,” she said.

 

Rescue and Recovery

A more immediate task for the new mayor involves $22 million earmarked for Northampton under the American Rescue Plan Act (ARPA). Sciarra said one of her first actions will be appointing an advisory committee to determine how to best allocate the ARPA funds. She appreciates that not everyone starts a term in office with these resources.

Vince Jackson

Vince Jackson says businesses have been opening and closing in Northampton at about the same rate during the pandemic.

“It’s spectacular to have these funds, but it’s also a huge responsibility,” she said. “This money comes out of a tragic time, so I want to make sure we steward it well and get the most out of it to benefit Northampton.”

This year will also see a new municipal office with the introduction of the Department of Community Care. This new area of public safety resulted from the efforts of the Northampton Police and Review Committee appointed by previous Northampton Mayor David Narkewicz and Sciarra while she was City Council president. The review committee was charged with looking at what changes should be made to improve public safety.

“Their top recommendation was to create a city department to provide an unarmed response to non-criminal calls,” Sciarra explained.

After hiring Sean Donavan as implementation director for the department in November, the next step is to set up meetings with fire and police dispatchers to figure out how calls from the public will be allocated. Sciarra noted that, because the police have been the default 24/7 responders, they have handled many calls out of their realm.

“Weary because we’re just tired of COVID and the sense that we start to make progress only to see another setback. And wary because of all the uncertainty when you try to plan ahead in this environment.”

“My goal is to bring everyone together so we can figure out how to transfer some of these calls to our new service. We have a lot to do, but it’s exciting to set up a new department,” she said, noting that the goal is to have Community Care up and running by July 1, the start of the new fiscal year.

From late summer through the fall, many Northampton businesses reported robust sales, some approaching 2019 numbers. In December, the rapid ascension of the Omicron variant of COVID caused the mood to change. Vince Jackson, executive director of the Northampton Chamber of Commerce, explained it as people feeling “weary and wary.”

“Weary because we’re just tired of COVID and the sense that we start to make progress only to see another setback,” Jackson said. “And wary because of all the uncertainty when you try to plan ahead in this environment.”

For Jeffrey Hoess-Brooks, September and October felt like old times. Hoess-Brooks, regional managing director for the Hotel Northampton and Fairfield Suites, noted that, even when business was up, staffing levels were down — which remains an issue. On some days, the housekeeping crew could not finish their work until evening hours because they were so short-staffed.

“Everyone was pitching in to help,” Hoess-Brooks said. “I cleaned more guest rooms this summer than I have in my entire 32 years in the industry.” Still, while January and February are traditionally slow months, he remains optimistic that business and staffing will improve by spring.

Northampton at a glance

Year Incorporated: 1883
Population: 29.571
Area: 35.8 square miles
County: Hampshire
Residential tax rate: $17.89
Commercial tax rate: $17.89
Median Household Income: $56,999
Median Family Income: $80,179
Type of government: Mayor, City Council
Largest Employers: Cooley Dickinson Hospital; ServiceNet Inc.; Smith College; L-3 KEO
* Latest information available

To find ways to keep going, Cahillane said many business owners are upgrading their online shopping and ordering capabilities, while others are renovating their locations.

Despite all the challenges, Jackson remains hopeful about the coming year. He pointed out that, since the beginning of the pandemic, Northampton has seen 20 businesses close, but 20 new businesses opened during the same time. “It speaks to the resilience of the community and the example that it sets for the entrepreneurial spirit in Northampton.”

 

Raising All Boats

Meanwhile, Cahillane is busy planning her first community event for 2022, the Northampton Ice Arts Festival, scheduled for Feb. 11, featuring various ice sculptures throughout downtown.

“We’ve got our fingers crossed that we will be able to have the event, especially because it’s outside,” she said, acknowledging the uncertainty while continuing to move forward.

Outdoor dining, which Cahillane has called a lifesaver for many restaurants, remains very popular. Amit Kanoujia, general manager of India House (see story on page 25), is looking to start his outdoor seating earlier and expand it later this year because so many people have asked him to consider it. “In the early spring, our guests bring jackets, and by the fall, they are willing to wear parkas to soak in as much of the outdoor experience as they can.”

Kanoujia remarked on the spirit of cooperation he’s seen among businesses and city leaders to keep moving forward. Jackson echoed that sentiment and added that collaboration is more important now than ever before.

“At the chamber, we try to remind everyone that we are all investors in our community and in our economy,” he said. “When one succeeds, we all succeed.”

Hampshire County

Neighborhood Connections

By Elizabeth Sears

Elizabeth and Lennie Appelquist

Elizabeth and Lennie Appelquist say local small businesses — like their clients — are the economic drivers of communities.

There is a marquee sign on Northampton Street in Easthampton that has become quite the local sensation. This old-fashioned sign has caught the attention of many in the Hampshire County community with its constantly revolving inspirational quotes. It belongs to Cider House Media, a marketing company owned by Lennie and Elizabeth Appelquist, who launched their firm after moving to Easthampton from Los Angeles.

“In 2013, my wife and I ended up moving back here, she grew up here in Easthampton,” Lennie said. His original background was in the film industry, but his hobby in website design ended up developing into its own company. “We still had a lot of clients we were carrying with us, so that’s what we did. We started Cider House here officially.”

Cider House Media provides a wide gamut of marketing services, ranging from branding, website building, and search-engine optimization all the way down to smaller jobs like fixing a website’s e-mail form. No matter how large or small the task, he said, the company focuses on delivering outcomes for whatever needs clients might have.

“At our core, what we really like to do is work with small businesses that matter to their communities, that may not have the resources to do all of the marketing, or the technical expertise to do the website and handle the marketing … but also can’t necessarily afford a really large, big-city firm to take care of all those,” Appelquist said.

The majority of Cider House Media’s clients are local businesses in the Western Mass. region. Its focus has been websites for small businesses that touch their local markets, Appelquist said.

“Our founding belief, our belief that drives us, is that local businesses and small businesses in our towns, not just here in Western Mass. but everywhere, really are the economic drivers of our communities,” he explained. “They’re also a kind of life’s blood. They are what make our communities really awesome, the small businesses, and we just really like to work with them.”

“At our core, what we really like to do is work with small businesses that matter to their communities, that may not have the resources to do all of the marketing, or the technical expertise to do the website and handle the marketing … but also can’t necessarily afford a really large, big-city firm to take care of all those.”

A strong online presence has become a growing need for small businesses as they acclimate to the demands of internet-based consumers. Shortened attention spans paired with the massive shift to remote work brought on by the pandemic has amplified the need for businesses to have fast and efficient websites, Appelquist said.

“We were just having a debate this morning about website loading times,” he told BusinessWest. “The pandemic shed a light on a lot of things, and people really expect a lot out of what they get delivered online, so what they’re looking for trend-wise is a website that loads really quickly. They also want a website that delivers clear information right up front without them having to think too much or dig too deep.”

He explained how savvy consumers not only crave deliverability, but also require accurate information. Cider House Media helps clients take control of their online presence, which involves ensuring the consistency of all representative information found across the web.

“When someone is looking for a service, a product, a restaurant’s hours, the site should load fast, and then there should be a very clear path to the information they’re looking for,” Appelquist said. “A trend we’re seeing with a lot of small businesses is making sure they take control of all of the places where people can interact … their data becomes their brand, and so every touch point on the web, on other third-party websites, on their website, when someone answers the phone at the office, it all becomes representative of what their brand is. If it’s inconsistent, that just says inconsistency to the consumer.”

 

Changing Times

Cider House Media felt the severe impact the pandemic had on small businesses, experiencing client cancellations and a decline in activity at the beginning of 2020. It had just launched its largest-ever online advertising campaign, and an uncertain marketplace led the Appelquists to question if they were going to survive. However, after a few months, they started to see an interesting shift in their business.

“All of a sudden, every business that was out there trying to figure out a way to reach their clients realized they needed to be online, and they needed to understand what they were doing. They needed to understand how online marketing worked, how their social-media worked, and how ads worked,” Lennie Appelquist said.

This resulted in a transition from their initial decline to a sudden flood of business. It has been almost two years since the Cider House Media staff have been able to get together in the office, but business has essentially stabilized.

“All of a sudden, every business that was out there trying to figure out a way to reach their clients realized they needed to be online, and they needed to understand what they were doing. They needed to understand how online marketing worked, how their social-media worked, and how ads worked.”

Even so, the pandemic has caused them to rework their philosophy and really think about how to help their clients leverage the internet and people’s habits to bring in business while simultaneously facing the obstacle of not being able to utilize a physical retail space. “The marketplace changed along with the world, so we had to be agile and change some of our approach as well.”

Cider House Media’s increase in activity during the pandemic did not stop with the growth of its clientele. “One thing that happened over the pandemic is an interesting market we got into — the community-access TV market,” Appelquist said. Since the beginning of the pandemic, Cider House Media has started five and launched four additional websites for public-access television.

“That’s been a real big education, and since one of the things we really love is to work with businesses, nonprofits, local organizations, arts organizations, touchpoints in our community that make a difference … it was our first experience building something that was a real journalistic news resource. Things like that have been great.”

Cider House Media has been involved in several community-oriented projects, perhaps the most noteworthy and high-profile one being One Ferry Project, a mill-building revitalization project in Easthampton.

“Locally, we launched this year a new brand and website for the One Ferry Project,” Appelquist said. “We did the brand, the logo, the marketing tools, all the signage for the building, the website. The process for potential renters or buyers of space, condos, rental units, office space, we created a mechanism for them to inquire on the website and reach whomever they need to reach.”

Cider House Media has been engaging in its community ever since the couple moved into their office in Easthampton. Lennie and Elizabeth are both members of the Cottage Street Cultural District Committee, and Elizabeth is on the board of the River Valley Co-op, as well as president of the Emily Williston Memorial Library in Easthampton. Additionally, they have been regular participants in the Art Walk put on by Easthampton City Arts, which is a program that features art exhibits and creative performances open to the public.

“When we got our office in Easthampton, we wanted to kind of be part of the community and meet people, so we actually asked the director of Easthampton City Arts if we could be part of the Art Walk and have an artist display their work and have people over, and they were like, ‘absolutely, yes,’” Lennie said. “Almost from the time we opened our office in Easthampton, we were a destination on the Art Walk as well as working with them.”

Lennie and Elizabeth opened an art gallery on Cottage Street in Easthampton as a second business in 2018, helping to celebrate the work of local artists by hosting local art events, spoken word, and poetry. The gallery closed as a result of the pandemic, but Cider House Media still remains committed to supporting the arts in Hampshire County.

“One of the things in Easthampton, but also Pioneer Valley and Western Massachusetts, that I just find so, so amazing is how integral the arts are,” Lennie said. “Art, like commerce, is really important, and I think the art and the culture, and the ability to interact with art and meet the artist, and interact and find those people that you intersect with at those types of events … it’s all your community.”

 

Word on the Street

Lennie Appelquist spoke of the charm possessed by the walkable towns of Hampshire County, and how small details like connecting over the marquee sign or the local art exhibits creates a positively unique environment. He noted the ample opportunities for networking, partnerships, and synergies, describing a local butcher participating with a night with food at the local brewery. Above all, he emphasized the community-oriented nature of the area, and how gratifying it is to work with businesses in the county.

“All those opportunities that you have to be part of a community, to create community, to interact with community, are really, really important,” he said. “So I think that’s the part we like the most — helping a lot of our clients give voice to what excites them and drives them to do their business, and why they go do it every day.”

Insurance

What’s Covered?

By Mark Morris

Michael Long

Michael Long says inflation in the cost of construction materials is complicating the equation of replacement protection.

 

When preparing a homeowners policy, insurance companies want to know all the details. They’re not being nosy — they just want to accurately cover any potential loss, even the unexpected ones.

Indeed, insurance agents who spoke with BusinessWest said every homeowners policy begins with a worksheet that captures anything and everything about the home. Inquiries range from the obvious — like the age of the house, square footage, and condition of the roof — to details about the kitchen counters (formica or granite?), whether rooms feature hardwood floors or carpeting, as well as many other questions.

“We ask for lots of details so we can get a true estimate of the home to properly gauge the replacement value,” said Trish Vassallo, director of Operations for Encharter Insurance in Amherst, noting that policies are based on what it would cost to replace the home and its contents if there was an event that resulted in the total loss of the home, such as a devastating fire or tornado.

Insurance companies also try to factor in cost increases in building supplies and labor, so some offer homeowners policies with extended replacement protection that will cover 25% or 50% above the insured amount of the home.

Michael Long, CEO of the Axia Group in Springfield, explained that, with recent hyperinflation in building materials and labor, extended coverage may not be enough. Lumber has experienced a massive increase in price since the beginning of the pandemic, driven by supply-chain issues and an increase in demand. One measure for estimating building costs is the price for a board foot of lumber.

“Customers ask us why their policies increase each year, and the answer is the inflation guard, which keeps the policy in line with current construction costs.”

“Not long ago, a thousand board feet of lumber cost $345,” Long said. “It’s now up to $1,600 per thousand board feet.” That’s why one of the first conversations Long has with his clients is to make them aware of policies that offer guaranteed replacement costs that will cover rebuilding a home no matter what happens to the price of materials and labor.

While guaranteed replacement might be worthwhile for high-value homes, it can be expensive coverage. A more affordable way to keep pace with rebuilding costs comes in the form of policies with inflation-guard endorsements. Trish Woodbury, Personal Lines manager for McClure Insurance Agency in West Springfield, explained that policies with inflation-guard coverage are designed to increase the limits of what the insurance company will pay based on the costs of materials.

“Customers ask us why their policies increase each year, and the answer is the inflation guard, which keeps the policy in line with current construction costs,” she said.

Customers also ask Woodbury why the estimated replacement cost on a homeowners policy is so different than the market value of the home. The main reason is that market value is driven by the ups and downs of the real-estate market and is calculated using the house as well as the lot it sits on.

“The estimated replacement cost is based on all the specs of your house and the amount the insurance company will pay to bring you back to where you were before the incident that caused your loss,” Woodbury said. “We often have to explain the difference because it’s a far different number than the market value.”

That’s why including everything in the house from top to bottom is essential to having it insured. For example, if people fail to report they have a finished basement out of concern they may have to pay higher taxes, they won’t have coverage for a loss.

“We are not trying to uncover a tax increase for the towns; our concerns are, if you have a devastating loss, we want to make you whole again,” Vassallo said. “If you have a finished basement, we want to know how finished — is there a TV room, workout equipment, is there a bathroom down there? These are all important factors so we can come up with the appropriate replacement value and include it.”

 

Water, Water Everywhere

The most common claim for a homeowners policy is water damage from a leaking roof, burst pipe, or faulty toilet. Long pointed out that, if a burst pipe happens when no one is home, damage can be substantial, and the claim can be huge, even approaching six figures.

Because water-damage claims are so common and expensive, Woodbury said homeowners can now install devices to prevent a severe incident.

“One of the devices is an automatic water shutoff when a leak is detected,” Woodbury said. “Insurance companies have begun offering discounts to homeowners who install these.”

Damage from flooding is not covered under a traditional homeowners policy. Insurance companies define flooding as water from the surface and below, usually entering through the foundation of a house. If a homeowner has a mortgage and their house is in a high-risk zone for flooding, they are required to have flood insurance. Long pointed out that changing weather patterns may require a new way to think about flooding.

“Most people figure, if they are not near a river or other body of water, they’re OK,” he said. “If we received 42 inches of rain and your house is on a hill, it could still receive flood damage that would not be covered by a traditional insurance policy.”

“Without umbrella coverage, if you tried to sell your house while there was a personal-liability judgment against you, the creditors could go after the proceeds from the sale.”

Woodbury added that anyone can buy flood insurance, and if a house is not in a high-risk zone, the homeowner will receive a preferred rating and a lower price for the coverage. “It’s available to everyone, and we’ve been encouraging people to consider it.”

In addition to covering the dwelling unit, homeowners policies will also cover personal property — up to a point. If there are special items such as expensive jewelry or fine art, the best approach is to add a coverage rider for those items. As an example of why riders make sense, Vassallo gave an example of someone who owns a $75,000 baby grand piano.

“If you had a total loss, such as a fire, and your content limits are $200,000, replacing the piano would take a huge chunk of that $200,000, leaving you a much smaller balance to cover everything else,” she said. Thus, purchasing an inexpensive insurance rider for the piano gives it full coverage with no deductible, and it no longer affects the personal-property limit. “So, it becomes a separate item that we want to keep separate.”

Another type of policy associated with homeowners insurance is umbrella coverage. These are personal liability policies that provide coverage when the limits of a homeowners and auto insurance policy aren’t enough to pay a claim.

Umbrella coverage was once thought to be necessary for homeowners who have a dog, a swimming pool, or a young driver. Vassallo said. But with payments for personal-injury claims going higher all the time, everyone should consider the added protection of such a policy. “We even suggest it for renters because you never know who’s going to sue you.”

Some people feel they don’t need an umbrella policy because the Homestead Act protects them, Long said. But while it prevents creditors from taking a person’s home, the act’s protection stops there.

“Without umbrella coverage, if you tried to sell your house while there was a personal-liability judgment against you, the creditors could go after the proceeds from the sale,” he noted.

Water damage may top the list of common claims, but Long said dog-bite claims are growing in number. A typical homeowners policy can provide some coverage, but he strongly recommends dog owners have an umbrella policy, as the average claim for a dog bite is $40,000 — and people with a dog-bite claim often pay much more for homeowners policies in the future.

For many years, companies have maintained lists of dogs they will not insure under a homeowners policy. Woodbury pointed out that the list is driven by the number of claims they see for certain breeds.

“The lists change, too,” she said. “Because companies have seen fewer claims on German shepherds and huskies, they have come off some lists.”

Before purchasing a dog, Long recommends homeowners call their insurance agent, especially if they are not set on a particular breed. “Your agent can give you the current list of dogs the companies will not cover with insurance.”

 

Remote Control

While many people work from home these days, that work can take many forms. A person working full-time for a company is different than someone who operates a home-based business. Vassallo said homeowners policies are not intended to protect business exposure, so a person who runs a business out of their home needs to see their agent for a rider to their home policy.

Liability can become an issue if customers come to the home. It’s not unusual for tax accountants, music teachers, and others to have people at their home for business reasons. In insurance terms, that’s a liability exposure that can be addressed with a separate commercial rider for protection.

“Otherwise, using the example of the music teacher, if a student or parent slipped and fell, the teacher would have no protection,” Vassallo said.

Home ownership brings with it plenty of physical hazards. Insurance companies have begun offering protection for virtual hazards such as identity theft and cyberattacks.

Long said cyberattacks are growing at a rate of 200% every year. One of the top schemes is phishing — when a fraudster sends an e-mail that appears to be from a reputable company and encourages the receiver to click on links that compromise their security. But cyberattacks have moved away from laptops and phones and can now impact other areas of the house.

“Hackers are known to access data through WiFi-enabled thermostats,” Long said, adding that those who own WiFi-enabled refrigerators have also experienced attacks by hackers who use the appliance to mint cryptocurrency, such as bitcoin. “Many policies offer identity theft, and we are now strongly recommending our clients to add cyber protection.”

Before a homeowners policy comes up for renewal, agents will contact their customers to make sure their coverage stays up to date. It’s important for insurers to know about improvements such as a kitchen renovation.

“If you’ve upgraded to granite counters, it will now cost more to rebuild your home if you had a claim,” Woodbury said. “We want to make sure the limits on the policy keep up with the cost of rebuilding your house.”

Obviously, homeowners are not looking to pay more for coverage, and there are options for those who are interested only in price. Vassallo tries to help her customers understand why having sufficient coverage is so important.

“This is probably the largest asset they will ever own,” she said, “so let’s make sure we properly protect it.”

Commercial Real Estate

Fighting the Fight

Evan Plotkin

Evan Plotkin says a mural planned for this wall near Stearns Square will pay homage to that area’s important role in Springfield’s history.

Evan Plokin was joking — well, sort of — about just how well his team seemed to manage while he was home battling mesothelioma and rehabbing from complicated surgery to help rid his body of cancer.

“I learned that this place could function just fine without me,” he said, tongue in cheek, noting that his company, NAI Plotkin, completed several deals during those weeks while he was out, putting a cap on a busy year, despite damage done to the economy by the pandemic. “The four months I was pretty much out of action I was thinking the worst, but when I came back, all the deals that were in the pipeline that I thought were never going to close … things suddenly started to happen.”

Overall, this lengthy, ongoing ordeal — he was officially diagnosed with mesothelioma in March 2021 — has been a learning experience on many levels, starting with the disease itself.

Plotkin confessed to knowing little about it when he was diagnosed, other than the only way to be stricken with it is through prolonged exposure to asbestos — or, as he has learned since, through heavy use of talc. And a “review of his life’s story,” as he called it, revealed that he falls into that category.

“I had rashes when I was a youngster, throughout my elementary schools, and I can always remember my grandmother putting the powder on me,” he recalled. “As I got into sports, when I would sweat a lot, I would break out, and the baby powder helped. And I remember when I was playing football in high school, I would douse my shoulder pads with it before every practice and before every game.”

This review of his life and has led to a different kind of learning experience, this one concerning ongoing legal action against Johnson & Johnson — maker of the baby powder he put on those shoulder pads — which he is now a big part of.

“I’m on the creditor’s committee — we just had a meeting recently; five of us are representing 40,000 claimants in this litigation,” he said, noting that these claimants are pushing back hard on J&J’s efforts to form a separate company to capture all asbestos claims related to its baby powder and then, presumably, file bankruptcy. “Every one of us who has this disease wants our day in court, and not have this piled into a bankruptcy settlement.”

While waging battles on these various fronts, Plotkin, who firmly believes he’s on the road to recovery and is now back in his office several days a week, is continuing another fight — his decades-long struggle to return downtown Springfield to the vibrancy he knew when he was young.

Long a staunch advocate for the city and firm believer in the power of the arts as an economic-development strategy — he’s one of the organizers of the annual summer jazz festival in the city — Plotkin said considerable progress has been made in recent years to make Springfield a more attractive place to live and work, but there is still much to be done.

He talked about the need to become creative with the hundreds of thousands of square feet of vacant office space in the city (again, see the story on page 38), to renew and escalate efforts to revitalize the properties on Main Street across from MGM Springfield, and to continue work to use the city’s open spaces, especially its parks, to draw new residents — and businesses as well.

With that, he turned his attention to his latest project, a giant mural that will occupy a wall facing Stearns Square on Worthington Street.

Working in tandem with John Simpson, an art professor at UMass Amherst whose murals grace Elm Street and the I-91 viaduct, as well as the Springfield Improvement District, Plotkin, through a nonprofit he created called City Mosaic, won a grant to transform that wall — currently featuring faded images of cameras and related products sold at a store there in the 1940s — into a history book of sorts.

“It’s going to be a composition — we’re going to give a nod to many of the historic and important people from Springfield, right up to the present,” he said. “It’s going to be the largest mural in the city.”

For this issue, BusinessWest talked with Plotkin about the many battles he’s waging, and the progress he’s making with what could be considered the big picture — figuratively, but also quite literally.

 

Joining the Battle

Plotkin, who has long prided himself on taking good care of his body, exercising, and eating the right foods, said his cancer diagnosis nearly a year ago caught him off guard and left him searching for answers.

“To suddenly be told that you have this terrible disease … that was very traumatic,” he said, adding that, while he became consumed with understanding how he contracted mesothelioma, the more immediate concern was confronting the disease.

He underwent what is known as a HIPEC (hyperthermic chemotherapy) procedure in August. After removing visible tumors through standard surgical procedures, a surgeon will administer HIPEC treatment, during which a heated sterile solution — containing a chemotherapeutic agent — is continuously circulated throughout the peritoneal cavity for up to two hours.

The 10-hour procedure was followed by three months of rehabilitation, said Plotkin, noting that he lost more than 50 pounds through the ordeal, suffered a few setbacks while recovering, and endured a few trips to the emergency room.

But he believes the worst is over and that he is on the road to recovery.

“I’m feeling really good right now, so I’m very optimistic about my future,” he said. “I feel almost as good as I did before the surgery; I just have to watch it … but I’m back to normal, and everything is good for me.”

While knocking on the nearest available wood, Plotkin noted there isn’t much available data on HIPEC. “And the doctors and the oncologists — they don’t have any predictions for you,” he went on. “They just say they want to take film every six months and go from there.”

Meanwhile, he said many others in his situation have not been as fortunate in their fight.

“You hear some of the stories from some of the people you meet, and their stories are not as good. I just learned about a 28-year-old boy who had the surgery who died from complications — kidney problems after the surgery.”

Such stories put more emphasis on the ongoing lawsuits against Johnson & Johnson, which, by many accounts, involve more than 38,000 claimants and nearly $4 billion in damages being sought.

At present, that fight is on a pause of sorts after a bankruptcy judge in North Carolina halted the lawsuits against J&J after that company formed a subsidiary in Texas, known as LTL, to absorb the parent company’s asbestos liabilities. LTL promptly filed for bankruptcy in North Carolina.

The move, known as a ‘divisive merger’ as well as a ‘Texas two-step’ (because that’s where LTL was formed) has been slammed by lawmakers, including U.S. Sen. Elizabeth Warren, and Plotkin said claimants in the various suits are girding for a protracted battle.

“Everyone is lawyering up, and they’re ready to have hearings,” he said. “All this is going to be hopefully resolved, one way or another, in February.”

While the court fight against J&J is now capturing some of Plotkin’s time, he also has his work — a broad phrase, to be sure — keeping him busy.

He said he worked remotely for some time but is now back in his office at 1350 Main St., the one with the view facing south toward MGM Springfield. And he referenced what he can see out his window when talking about the major challenges still facing Springfield.

He said that, when MGM was originally proposed, the thinking — if not the promise — was that the casino, with its front door on Main Street, would bring more vibrancy, not to mention additional commercial development, to both sides of the street and that broad area.

That hasn’t happened yet, in part because most all casino visitors have been entering and exiting through the parking garage (especially during the pandemic), leaving little foot traffic on Main Street and, therefore, a minimal trickle-down effect.

“People go right back in the garage, and they’re out of here,” he said. “And that needs to be fixed; we need to get those people into the downtown.”

Turning his attention back to Stearns Square, he said that area has seen progress on several fronts in recent years, including the park itself, which underwent major restoration efforts a few years ago. Around it are new businesses, including Dewey’s, a jazz club; the promise of new restaurants; and prospects for that area once again being the centerpiece of a walkable city.

The new mural will be part of all this, he said, adding that it will turn back the clock in many respects.

“In one part of the mural, there’s going to be an image of what Stearns Square looked like more than 100 years ago,” he explained, noting that this look back will show how the ‘Puritan’ statue now at the corner of Chestnut and State streets near the Quadrangle was originally in Stearns Square, with the Puritan facing a globe at the turtle fountain in the south end of the park.

“The narrative behind that is the fountain has a giant globe on it with fish and turtles around it, and there’s water,” he explained. “It was the Puritan looking at the new world, and he knew he had to cross over the water to get there.”

 

Body of Evidence

As he related the history of the park and spoke about his mural project, Plotkin said he’s always believed the Puritan statue should return to its original setting.

He admits he’s probably not alone with that view, but he acknowledges that such a move would certainly be a longshot at this point and an uphill battle.

Speaking of uphill battles … he’s been involved with many of them lately, from his fight against mesothelioma to the drawn-out court skirmishes with Johnson & Johnson, to his campaign to revitalize downtown Springfield.

All of them are ongoing to one extent or another, and Plotkin is waging them the only way he knows how: with passion and determination.

 

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

Features

Unwelcome Surprises

By Jodi K. Miller, Esq. and Ryan J. Barry, Esq.

 

Jodi K. Miller

Jodi K. Miller

Ryan J. Barry

Ryan J. Barry

A woman injures her ankle while jogging and goes to the local emergency department for treatment. Despite her injury, she makes sure to go to a hospital in her health plan’s network. Some weeks later, she receives a significant — and unexpected — bill from an emergency department physician. While the hospital was in her health plan’s network, it turns out the treating physician was not. Her health plan paid a portion of the physician’s charges, but she is responsible for the remainder.

This type of ‘balance’ or ‘surprise’ bill has been an ongoing issue when patients receive care from out-of-network providers, some of whom then bill patients the difference between their charges and the health plan’s benefit payment for out-of-network services. These bills are often a surprise because the patient either was not able to choose an in-network provider or was unaware that the provider was out of network until after the services were rendered.

“This type of ‘balance’ or ‘surprise’ bill has been an ongoing issue when patients receive care from out-of-network providers, some of whom then bill patients the difference between their charges and the health plan’s benefit payment for out-of-network services.”

Recently enacted legislation at the federal level and in Massachusetts attempt to address this issue.

A new federal law, the No Surprises Act, went into effect on Jan. 1. The No Surprises Act imposes requirements on healthcare facilities and providers, as well as on health plans, in three key areas: emergency services, non-emergency services provided by out-of-network providers at in-network facilities, and air ambulance services. When those services are rendered, health plans must make a payment to the out-of-network providers, and patients are responsible only for the cost-sharing obligations they would have incurred had the care been provided in network (e.g., co-payments and deductibles).

If the provider does not accept the health plan’s payment, the plan and the provider must attempt to negotiate a reimbursement rate. If negotiations fail, the plan or the provider can initiate a dispute-resolution process to resolve the issue. In these cases, providers may not bill the patient more than the cost-sharing amount, and they are potentially subject to civil monetary penalties of up to $10,000 per violation if they do so.

The No Surprises Act also provides that out-of-network providers of certain scheduled services may not balance-bill patients unless the provider has given advance notice and obtained written consent from the patient. The act sets out specific requirements for the content of the notice, including a good-faith estimate of the costs incurred and a list of in-network options for the patient. This notice and consent process, however, is not available for out-of-network providers of emergency services and other ancillary services (such as anesthesiology, pathology, radiology, and other diagnostic services), or in circumstances where there no in-network provider is available.

Other provisions of the No Surprises Act, including disclosure requirements for both providers and health plans, also aim to increase transparency and consumer protections. Providers are required to publicly disclose and provide to patients a one-page notice about the balance-billing requirements and prohibitions of the No Surprises Act, as well as state law. As discussed below, Massachusetts, too, has recently imposed new disclosure requirements for providers.

Notably, the protections of the No Surprises Act do not apply to emergency services by ground ambulance providers. In those circumstances, out-of-network ground ambulance providers may still bill patients for significant balances, which are invariably a surprise to patients who had no ability to choose an in-plan ambulance provider in an emergency.

Regulations implementing the No Surprises Act have not been without controversy. Medical associations have criticized the regulations implementing the dispute-resolution process as unfairly favoring health plans. Health plans, on the other hand, have lauded the regulations, maintaining that the process will make healthcare more affordable and avoid unnecessary increases in health-insurance premiums.

On Jan. 1, 2021, Massachusetts passed its own law to address balance billing for non-emergency services. That law, which also took effect on Jan. 1, requires healthcare providers to disclose to patients certain information regarding their participation in patients’ insurance plans and patients’ financial obligations for scheduled procedures and services.

Generally, providers are required to tell patients whether they participate in the patient’s insurance plan. If the provider does not participate in the patient’s plan, the provider must disclose the charges and any facility fees for the procedure or service. The provider must also inform the patient they will be responsible for the charges and any facility fees not covered through the patient’s health plan and that they may be able to obtain the procedure or service at a lower cost from an in-network provider.

The law also imposes new requirements on in-network providers to disclose information to patients regarding charges for procedures or services. Providers must also inform patients if their participation in the patient’s health plan changes during a continued course of treatment and make various disclosures when referring a patient to another provider.

There are two consequences if a provider violates the Massachusetts law. First, if an out-of-network provider fails to provide the required notifications and information, the provider cannot bill the patient at all, except for any co-payment, co-insurance, or deductible that would be payable had the patient received the service from an in-network provider. Second, the commissioner of the Department of Public Health is authorized to fine non-compliant providers up to $2,500 per violation.

The recently enacted federal and state laws seek to provide protections to consumers to avoid inadvertent balance bills from out-of-network providers. As these laws go into effect at the start of the new year, providers and health plans should be ready to implement the requirements, and consumers should see fewer surprises in their mailboxes.

 

Jodi Miller and Ryan Barry are partners in Bulkley Richardson’s healthcare practice.

Hampshire County

Positive Change

By Mark Morris

Ed Wingenbach

Ed Wingenbach says Hampshire College is identifying the urgent challenges of the 21st century and making them the emphasis of the curriculum.

If you were designing a college education today, what would it look like?

That’s the question Edward Wingenbach, president of Hampshire College, discussed with faculty, staff, and students in 2019. Back then, the college was facing financial struggles and even explored the possibility of merging with another institution.

At that time, the college unveiled Change in the Making, a fundraising effort launched with help from documentary filmmaker and Hampshire College alum Ken Burns. While the goal of the five-year campaign is to raise $60 million to directly fund the operations of the college, it also presented an opportunity to reinvent the definition of a liberal-arts education.

Wingenbach said the approach starts with identifying the urgent challenges of the 21st century and making them the emphasis of the curriculum.

“We have adopted four specific challenges that our faculty will incorporate into many of the courses they teach,” he said. For academic year 2022-23, the questions are: how should we act on our responsibilities in the face of a changing climate? How do we disrupt and dismantle white supremacy? How do we decide what constitutes truth in a ‘post-truth’ era? And how can art and creative practices heal trauma?

Jennifer Chrisler, chief Advancement officer for Hampshire College, said the questions were compiled with input from faculty, students, and staff. “It is a way of organizing the college around the kinds of questions the world is facing and that young people really want to tackle,” she explained.

The questions will be reviewed every year to see if new ones need to be added or dropped, Chrisler went on. “It’s a chance for students, faculty, and staff to weigh in on the way the curriculum is shaped on a regular basis. That usually doesn’t happen in higher education.”

Jennifer Chrisler

Jennifer Chrisler

“It’s a chance for students, faculty, and staff to weigh in on the way the curriculum is shaped on a regular basis. That usually doesn’t happen in higher education.”

Recently, the campaign received $5 million from an anonymous doner to establish the Ken Burns Initiative to Transform Higher Education, an effort Wingenbach described as a subset of the overall Change in the Making campaign. The donor had no previous affiliation with Hampshire and didn’t know much about the college until Wingenbach and his staff began talks with them.

“The donor was excited about the work we are doing and wanted to help us accelerate it while, at the same time, honoring Ken Burns, who is someone the donor knows very well,” Wingenbach said.

 

Unique Model

Hampshire College has always sought to transform higher education. Wingenbach said the point of the Change in the Making campaign is to pursue that vision with renewed vigor.

“Most colleges will have students pick an academic track they will study for four years with the hope these courses will prepare them for careers and opportunities that probably didn’t exist when they started college,” he noted.

“By contrast, we’re saying no one knows what the challenges and opportunities are going to be five years from now, but they will require creative, entrepreneurial thinkers who can work across all kinds of fields of knowledge. Students from Hampshire College will have been practicing this approach in increasingly sophisticated ways.”

To illustrate how this works in a real-world setting, Wingenbach gave the example of the COVID-19 vaccine rollout. While the vaccine was an amazing accomplishment, it was also important to think about how to communicate with people to persuade them to change their behavior and get the shot. By putting so much emphasis on just the vaccine’s development, he contends that only half the problem was solved.

“The point is that problems get solved when the technical and social sciences work together,” he noted.

While this approach is new to incoming classes, Wingenbach reported that students are enthusiastic about it. Chrisler said donors feel the same.

“Donors are excited because our approach represents an incredibly needed change in higher education today,” she said.

Chrisler added that donors also support the college because, when students leave as alums, they often go on to do extraordinary things. While Burns is the most famous alum, Chrisler cited others, such as Manual Castro who was recently appointed to the Mayor’s Office of Immigrant Affairs by New York City mayor Eric Adams, the first time this position has been held by an undocumented person, or ‘Dreamer.’ Chrisler also cited Stephen Gardner, named in December as the next CEO of Amtrak.

“When he came to Hampshire, Stephen was interested in the infrastructure of railroads and music,” she said. “Now he will be able to shape what rail transportation looks like in our country.”

Burns has often credited his success to his experience at Hampshire. In a news release on the anonymous donation, he expressed humility for the gift made in his honor and supported the college’s current efforts.

“I know Hampshire is transformative because I experienced it firsthand,” the filmmaker said. “Fifty years later, our nation needs fresh thinking in higher education, and Hampshire is poised to deliver on that opportunity.”

The anonymous donation is the second substantial contribution since James and Paula Crown invested $5 million in the campaign in late 2020. Early indications show this innovative approach is helping build back enrollments.

“This year’s entering class was nearly 100% over last year,” Wingenbach said. “In addition, we have doubled the number of applications we had at this time last year.”

While admitting there is still much to be done, Wingenbach said enrollments are now comparable to 2016 and 2017, when the college had much larger classes.

 

Looking Ahead

Chrisler recalled the tough days of 2019 as a pivotal time that helped everyone realize the importance of Hampshire College as an institution both for what it has done and what it can do.

“The tough times crystalized for many people the need for Hampshire to remain an independent and thriving college for its students, for the Pioneer Valley, and for higher education overall,” Chrisler said.

These days, as the college continues to innovate and write its next chapter, she said these are exciting times. “Most of us here are deeply grateful to be a part of that story.”

Commercial Real Estate

COVID and Property Value

By Laura Bellotti Cardillo

 

Laura Bellotti Cardillo

Laura Bellotti Cardillo

When property-tax assessments in Massachusetts came out at the end of 2020, many business owners were surprised to find their values had stayed the same or increased. Those assessments were premised on income and expense data from calendar year 2019, and therefore did not factor in the beginnings of the economic impact of the pandemic.

Now that property-tax assessments for fiscal year 2022 are being determined, commercial property owners whose real-estate assets were negatively impacted by the pandemic should take another look. Assessors must rely on calendar year 2020 income and expense data to determine current values and assessments, and after almost two years of living with COVID-19, the question remains whether the pandemic is a temporary anomaly or the economic impact will be of longer duration.

If your commercial real estate has been hit hard by the pandemic, here are some best practices that could help you achieve a reduction in your property assessment and lower your real-estate taxes.

 

Provide Extra Data and Projections

If the pandemic has continued to hamper your property’s performance through 2021, provide data through the third quarter of this year. While the assessment is based on numbers through year-end 2020, proof that things have not improved undercuts the argument that the pandemic is merely a blip.

Projections for 2022, 2023, and 2024 can be helpful in this regard as well. Many industries anticipate that a full recovery will take years. Demonstrating that you are not anticipating a swift bounce-back can support your argument that a reduction now is warranted.

“If the pandemic has continued to hamper your property’s performance through 2021, provide data through the third quarter of this year. While the assessment is based on numbers through year-end 2020, proof that things have not improved undercuts the argument that the pandemic is merely a blip.”

 

Document Use of PPP and Other Relief Funds

In some cases, assessors have asked if businesses received funds from the Paycheck Protection Program (PPP) or other relief initiatives. It is highly unlikely that these funds would have been used in a way that would increase the value of your real estate, so they should not factor into the fiscal year 2022 assessment.

Because PPP was designed specifically to cover payroll, utilities, and operating expenses, demonstrating in detail how these funds were spent (using materials you likely already have from your loan-forgiveness application) should help assessors put the receipt of these funds in proper context.

 

Values and Assessments Can Change Annually

Municipalities in Massachusetts have the ability to adjust assessments annually. Because values can be recalibrated year to year, now is the time for assessors to lower the values for the commercial property types hit hard by the pandemic.

Assuming certain commercial real-estate markets have begun to tick back up already or will begin to do so in 2022, assessors can make the necessary adjustments if and when the various sectors of the commercial property market roar back to life.

 

Laura Bellotti Cardillo is vice chair of the property-tax and valuation practice at Pullman & Comley. She heads the law firm’s Springfield office.

Cover Story Top Entrepreneur

Towering Achievements

Dinesh Patel and Vid Mitta Are Reimagining a Springfield Landmark

In 1996, BusinessWest introduced a new recognition program, one that pays homage to the entrepreneurial spirit that has long defined this region. Since then, the Top Entrepreneur honor has gone to small-business owners, college and hospital presidents, and even Holyoke’s municipal utility. This year’s recipients are Dinesh Patel and Vid Mitta, true serial entrepreneurs who rolled the dice and purchased Tower Square, the iconic but troubled Springfield landmark, in 2018. Their efforts to change the landscape and reimagine the property have been slowed by COVID, and there are many chapters in this story still left to write. But there are signs of progress, and the partners’ patience, persistence, and entrepreneurial mettle are big reasons why.

Demetrios Panteleakis recalls his company being one of many commercial real-estate brokerage firms that were interviewed to represent the new ownership group at Tower Square as leasing agent.

He also recalls being rather surprised when the Macmillan Group won the contract. That’s because … well, he was rather candid in his assessment of what needed to be done with the downtown Springfield landmark.

Probably too candid, in his mind.

“I think I was pretty brutal when it comes to what needed to change and what types of investments needed to be made in the building,” he said, looking back more than three years. “I sent it to them kind of thinking, ‘they’re going to look at this and probably say, ‘forget this guy — there’s no way we’re doing all this.’

“But to my surprise, and to my surprise ever since, it’s been the complete opposite,” he went on. “They wanted to meet with me again, and they wanted me to go into detail on a marketing plan, they wanted me to go into detail on the improvements … the concept of doing away with traditional retail and doing more of a community-based approach for the tenants of the building and focusing on just the constant improvement of the building.”

Panteleakis said that this response to his “brutal assessment,” and the actions taken since, go a long way toward explaining why partners Vid Mitta and Dinesh Patel have been named BusinessWest’s Top Entrepreneurs for 2022, the latest winners of an award first handed out in 1996.

Actually, this is the second time they’ve won the award — sort of. Indeed, they were, and still are, part of the ownership and management team of the Springfield Thunderbirds that took home the Top Entrepreneur award for 2017 for their efforts to not only bring hockey back to the city but make it a force in efforts to reinvigorate the downtown.

The two were already serial entrepreneurs at the time MassMutual was looking to sell the Tower Square complex in 2017, owning everything from hotels to fast-food restaurants; from an information-technology-solutions company to early-education facilities. But this was their first real joint venture and certainly their first class-A office tower, and Panteleakis said they entered this exercise with what he called a “thirst for learning.”

Demetrios Panteleakis stands in the space in Tower Square now occupied by Country Bank

Demetrios Panteleakis stands in the space in Tower Square now occupied by Country Bank, one of many new tenants to arrive since Vid Mitta and Dinesh Patel acquired the downtown Springfield landmark.

“And that’s unusual,” he went on. “Most people who own buildings always think they know more than the broker; it’s rare for them to listen. I was shocked when they started instituting the plan, and they really stuck to it.”

While listening has been a major ingredient in their success at Tower Square — and in business in general — there are many others, the partners told BusinessWest, including patience, especially amid COVID-19, which has certainly slowed the pace of progress. But also watching and learning what has worked elsewhere (we’ll see some examples of that) and applying it to their venture.

Persistence and adherence to the plan are also keys, they said.

“We just keep moving and keep achieving one target at a time,” said Mitta in describing the overall strategy for the property. “Right now, we’re at 70% occupancy, compared to roughly 40% when we took over the building. So we still have another 30% to go, so we’re not there yet, and we work on a day-to-day basis based on the leads that we get. We’ve come this far, and we hope to go all the way to the finish line, to 100%.”

Patel concurred, noting that, while nothing has really been easy with this venture — undertaken mostly during the two years of COVID and made much expensive and complicated because of it (more on that later) — there are encouraging signs. Overall, the project has been a learning experience and has emboldened the partners in many ways.

“I think I was pretty brutal when it comes to what needed to change and what types of investments needed to be made in the building. I sent it to them kind of thinking, ‘they’re going to look at this and probably say, ‘forget this guy — there’s no way we’re doing all this.”

“This project has given us a lot of confidence,” he said. “If there’s a space, and the structure is good, like we have here, we know we can create something in our mind and move forward.”

Tim Sheehan, Springfield’s chief Development officer, lauded the work at Tower Square, saying that, in many respects, the partners’ efforts mirror the original mission of the property and take it a new and higher level at a different point in the city’s history.

“This is a critically important project for Springfield,” he said. “The whole impetus behind the building itself was to enliven the commercial business district of the downtown, and to enliven it by bringing businesses to the heart of the city, workers to the heart of the city, visitors, and supportive retail, and clearly the building has done that.

“When you look back at how this was conceived in the 1960s as part of a large urban-renewal effort, the contemplation of this building really started with a small group of civic and downtown business leaders, and ultimately it was advanced by MassMutual,” Sheehan continued. “So I guess you could say Tower Square continues to attract entrepreneurial investors to the property. And while the vision that those initial investors had was clearly bold, Dinesh and Vid’s vision to reposition the property is as bold, if not bolder.”

 

Background — Check

A quick look at the partners’ résumés and portfolios of business interests reveals why the phrase ‘serial entrepreneur’ applies to both.

A pharmacist by trade, Patel has become a prolific business owner and developer. His portfolio now includes several 99 Restaurant & Pub locations, including one in Greenfield; a Walgreens in Worcester; a CVS in Bridgewater, Conn.; three McDonald’s franchises, including one in Holyoke; several Hampden Inn & Suites locations across New England; a few adult day-care facilities; and even a self-storage operation.

As for Mitta, he started as a software programmer and has, over the past three decades or so, put together a broad and diverse portfolio of business interests known collectively as Mitta’s Group. Like Patel, he has properties in the hospitality realm, including several hotels within the Marriott, Hyatt, Choice, and Wyndham franchises, but also owns several early-education facilities operating under the name the Learning Experience, as well as Synergic Solutions, which provides information-technology solutions to businesses around the globe.

The new façade on the hotel at Tower Square

The new façade on the hotel at Tower Square is symbolic of the changes that have taken place at the property.

And they continue to invest in new ventures, including development of a 14-acre parcel in Windsor, Conn. into a mixed-use complex that will include a hotel, apartments, a gas station, a car wash, and other components. Work on the project, to be called Windsor Crossing, is set to commence next spring.

The top line on each résumé now, though, is Tower Square, and how these two came together to purchase the 50-year-old landmark is an intriguing story, which they summed up as a calculated risk well worth taking.

The two certainly knew each other well — as noted, they both had ownership stakes in the Thunderbirds, and Patel had sold some properties to Mitta — but they had never launched a joint venture together … until Tower Square came on the market in late 2017.

“Most people who own buildings always think they know more than the broker; it’s rare for them to listen.”

“When I came across this particular listing from MassMutual, I approached Dinesh and asked him what his thoughts were,” Mitta said. “He said that if I was interested, he was willing to partner, and that got the ball rolling.”

Patel recalls them having a lengthy discussion concerning the property — which came in two parts, the hotel and the retail/office complex adjoining it — on opening night of the Thunderbirds’ 2017-18 season, which came only a day before the deadline for submitting bids for the Tower Square property.

cover of BusinessWest’s Top Entrepreneur issue

This is actually the second time Vid Mitta and Dinesh Patel have been on the cover of BusinessWest’s Top Entrepreneur issue. They’re part of the ownership and management group of the Springfield Thunderbirds that took home the honor in 2017.

“Between 4 and 5 o’clock, I was in Northampton on a bike ride, and I thought to myself, ‘I want to pull the trigger on this,’” he went on, adding that a bid was submitted mere minutes before the 5 p.m. deadline.

Bidding on Tower Square was certainly not a slam-dunk proposition at the time; in fact, it was far from it. While the building, which changed the downtown Springfield skyline in dramatic fashion when it opened in the late ’60s, had some core tenants in its retail space — UMass Amherst, Cambridge College, and a CVS, among others — and several more in its office tower, the complex had certainly seen better days.

MassMutual was soon to be vacating several floors in the office tower, many spaces in the retail portion of the building were vacant or underutilized, and the hotel on the property had lost the Marriott flag that had flown over it for decades and was now known as the Tower Square Hotel.

But while others were looking at a glass half-empty — or far worse — the two partners saw potential, and something else as well: an important property in a city that they had invested in and become part of.

“My wife and I were having lunch together and started talking about Tower Square,” Patel recalled. “She described it as an ‘iconic building’ in Springfield and a ‘once-in-a-lifetime opportunity.’ She said, ‘we need to figure out how to get this building.’”

Mitta recalls having similar thoughts, and noted that, while their initial interest was focused on the hotel, which they successfully bid on first, they eventually pursued the rest of the property as well, paying $17.5 million for both halves of the operation.

And they did so understanding that there would be much larger investments to come.

“We knew what we were getting into,” said Mitta, acknowledging that this comment covers considerable ground, meaning acknowledgement that large amounts of work needed to be done not only to get the Marriott flag back on the hotel, but to renovate the parking garage; repair and upgrade aging equipment, including the elevators; and undertake other improvements to bring new tenants, and new vibrancy, to the property.

 

Building Momentum

Elaborating, the two partners said they entered this joint venture with a plan of sorts, one that would take shape over the coming months and years.

That plan called for focusing less on traditional retail and more on creating something approaching a community, with pieces that would complement one another, said Patel, adding that, even before he and Mitta had finalized their commitment to bid on the property, he was talking with Dexter Johnson, president and CEO of the YMCA of Greater Springfield, about moving parts of that operation, specifically the fitness center and childcare facilities, to Tower Square.

“This project has given us a lot of confidence. If there’s a space, and the structure is good, like we have here, we know we can create something in our mind and move forward.”

Those operations would eventually become part of a larger plan that called for attracting businesses that would bring convenience, as well as needed products and services, to those working in the tower, but also the students attending classes there and those living in and around downtown, said the partners, adding that other components have come to include White Lion Brewing Co., a spa (SkinCatering), and even the wine exchange that recently opened in the space next to the Hot Table restaurant.

“We never thought that this would come back as a retail building,” Mitta said. “But when we purchased the property, we knew that MassMutual had already put UMass and Cambridge College into the retail mall, and that gave us a good start toward bringing more semi-retail businesses into the mall, so it would be a win-win situation for all of us.”

Previous Top Entrepreneurs

2020: Golden Years Homecare Services
2019: Cinda Jones, president of W.D. Cowls Inc.
2018: Antonacci Family, owners of USA Hauling, GreatHorse, and Sonny’s Place
2017: Owners and managers of the Springfield Thunderbirds
2016: Paul Kozub, founder and president of V-One Vodka
2015: The D’Amour Family, founders of Big Y
2014: Delcie Bean, president of Paragus Strategic IT
2013: Tim Van Epps, president and CEO of Sandri LLC
2012: Rick Crews and Jim Brennan, franchisees of Doctors Express
2011: Heriberto Flores, director of the New England Farm Workers’ Council and Partners for Community
2010: Bob Bolduc, founder and CEO of Pride
2009: Holyoke Gas & Electric
2008: Arlene Kelly and Kim Sanborn, founders of Human Resource Solutions and Convergent Solutions Inc.
2007: John Maybury, president of Maybury Material Handling
2006: Rocco, Jim, and Jayson Falcone, principals of Rocky’s Hardware Stores and Falcone Retail Properties
2005: James (Jeb) Balise, president of Balise Motor Sales
2004: Craig Melin, then-president and CEO of Cooley Dickinson Hospital
2003: Tony Dolphin, president of Springboard Technologies
2002: Timm Tobin, then-president of Tobin Systems Inc.
2001: Dan Kelley, then-president of Equal Access Partners
2000: Jim Ross, Doug Brown, and Richard DiGeronimo, then-principals of Concourse Communications
1999: Andrew Scibelli, then-president of Springfield Technical Community College
1998: Eric Suher, president of E.S. Sports
1997: Peter Rosskothen and Larry Perreault, then-co-owners of the Log Cabin Banquet and Meeting House
1996: David Epstein, president and co-founder of JavaNet and the JavaNet Café

Patel concurred, noting how he and Mitta have seen the ‘education hub’ concept work in Worcester, and they believe it can work in Springfield as well.

In the office tower, said Panteleakis, the goal has been to take advantage of the attractive class-A space, including the floors vacated by MassMutual, as well as other amenities, such as on-site parking, those aforementioned service businesses, and a safer, more vibrant downtown to bring some of the businesses that had left Springfield back to its central business district while also bringing some new names to that area.

And that has happened with the addition of Wellfleet, which now has its name and logo on the building, as well as Farm Credit Financial Partners, the Hampden County District Attorney’s Office, Country Bank, several state offices, and many other new tenants.

“We’ve replaced 150,000 square feet vacated by MassMutual with 140,000 square feet of new tenants,” Panteleakis said, adding that there is one more full floor to fill and several “smaller pockets” that remain vacant.

The partners said that, while there is certainly a plan in place, the simple objective moving forward is to continue adding complementary pieces and creating a destination — something Tower Square was decades ago but hasn’t been for some time.

“If you look at the building today, it efficiently serves the needs of modern office tenants, and that’s been though significant upgrades to that space,” Sheehan said. “The investment of more than $20 million in completely refurbishing the hotel and restoring the Marriott flag will attract new and more visitors to downtown and enhance the city’s attractiveness as a meeting and convention destination. Additionally, they’ve created a sense of excitement — I don’t think you can use any other word — about what the building’s public space could actually be.”

While progress has been made on many different levels at the Tower Square property, the pandemic has certainly slowed its pace, due to everything from the soaring cost of materials to labor shortages, said the partners, adding that it has also made improvements and enhancements more expensive — and far more expensive, in many cases.

That’s especially true with the ongoing work at the hotel, where supply-chain issues have made it difficult to obtain needed materials in a timely fashion. Overall, the project, with a price tag that has risen past $30 million, is well behind the original schedule, which had the hotel reopening last year, but the partners are confident that the facility will be welcoming guests by the end of the second quarter of this year.

“COVID has hurt us because the cost of construction has shot up, and the cost of raw materials has shot up as well,” Mitta said. “Every time we import things from China or some other country, the container fees alone are almost four to five times what they used to be two or three years back. We don’t want to stop, so we had to pay these higher prices and keep going.”

As just one example, Patel noted that steel prices have risen 48% this year, an increase that could not have been foreseen when they bought the property.

“Increases of 10% or so, you anticipate that; you can factor that in,” he noted. “But 48% to 50%, you can’t plan for that. It’s all about supply and demand.”

Despite the skyrocketing cost of the project, the partners remain optimistic about the hotel and its prospects for the future. They said COVID will eventually relent, and when it does, people — if not businesses — will be ready and willing to travel again.

“People are coming back,” Mitta said. “They’re traveling, they’re using hotels, and the travel industry is coming back — especially when it’s not related to business travel.”

COVID has also brought a halt to any plans to develop the parcel across Main Street from Tower Square, known to many as the ‘Steiger’s lot’ because that’s where the department store once stood.

The rooftop area at Tower Square

The rooftop area at Tower Square is one of many that have a new look.

Original plans called for building a Hyatt on that property, but the pandemic and its deep impact on travel of all kinds put that initiative on ice, said Patel, adding that their plans will be revisited once the Marriott opens.

Meanwhile, they’re advancing plans for Windsor Crossing and continually looking for new entrepreneurial opportunities. That thirst for new opportunities brought them to Tower Square in the first place, and it has seen them through this challenging but ultimately fulfilling time.

“It’s been exciting,” Mitta said. “Every day is a new adventure.”

 

Landmark Decision

Flashing back to when the partners acquired the Tower Square property, Mitta noted that they had both a plan as well as a backup plan, one that called for converting the office tower into residential space if the office market didn’t develop as anticipated.

That backup plan wasn’t needed, obviously, although there have been some struggles, and COVID certainly has brought many unanticipated challenges.

Instead, the partners are moving forward, as Mitta noted, achieving one target at a time. The larger goal is not to turn back the clock and make Tower Square exactly what it was decades ago, but turn it back to the extent that the landmark is a destination and center of vibrancy.

There is still work to do, but if Mitta and Patel have proven anything, it’s that they are persistent and determined to make the plan they put on the drawing board more than four years ago a reality.

They’ve also shown that they’re quite worthy of BusinessWest’s Top Entrepreneur honor.

 

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

Features Special Coverage

Feeding Frenzy

Cheryl Malandrinos says the pandemic changed

Cheryl Malandrinos says the pandemic changed how people look at how they work and where they live, sparking greater demand for homes in Western Mass.

“A $180,000 house going for $275,000 … it can’t continue this way, or else the average homeowner won’t be able to afford a mortgage, and then the market will have to stabilize.” That’s a quote from a Realtor who spoke with BusinessWest last January about the low supply and high prices of homes in Western Mass. A year later, the situation has, simply put, not stabilized, with the region remaining an in-demand destination for remote workers and new housing stock still lagging. For potential buyers, it’s a situation that demands patience — and, again, hope for a correction down the road.

In her 25 years as a Realtor, Nancy Hamel has never seen anything like it.

Looking back at 174 houses sold in Amherst last year, 63 sold for more than $500,000, said Hamel, who is a top-producing agent with Jones Group Realtors. “That’s crazy. For years, we just had a handful sell for over $500,000.”

She rattled off some actual examples: a home with an asking price of $410,000 going for $511,000. A $595,000 listing selling for $675,000. A $649,000 listing topping out at $740,000. “It could just be underpriced, or it could be it rang all the right bells.”

Mostly, though, it’s supply — and that’s an issue in residential real estate that has pushed home prices into the stratosphere.

“Supply has just been very strange,” said Amy Hamel, Nancy’s daughter and partner on her team at Jones — and someone who, unlike Nancy, focuses primarily on the buyers’ side. It can be hugely frustrating.

“Lack of inventory has played a role in people panicking to find suitable housing,” Amy continued. “More people are able to work remotely now because a lot of companies decided to do that long-term because it’s worked so well. They’re saying, ‘why have communal space when we’re doing the same amount of revenue, or more, having employees work from home?’”

As a result, buyers have flocked to Western Mass. — and other attractive regions of the U.S. when it comes to quality of life — and the existing housing stock is not sufficient to meet demand.

“We see a lot of people moving here from all over — from New York, or from out west, Arizona, New Mexico. People are picking a place on a map, and Amherst is definitely a top place for people to come to,” she explained. “So prices are going up more than I could have ever imagined. Money is coming in from all over the place.”

“When it comes from high-home-value regions like California, where a half-million doesn’t seem as expensive for a home, that drives up prices for locals, for whom that is an intimidating chunk of change,” Amy said. “What they’re paying beyond the asking price is unlike anything I’ve seen in my 15 years.

“A lot of people are saying it’s been the best year for Realtors,” she went on. “Not really, unless you’re a top listing agent. Working on the buying-agent side has been very frustrating. I’ve had a lot of buyers put in many, many different offers before they found something, and still I have a lot of buyers laboring because they’re being outbid. And it’s not like they haven’t put in strong offers.”

Nancy noted that her daughter lost out on $14 million in offers last year. “She just got outbid — by people with cash, people offering $50,000 over asking price and still not getting it.”

“A lot of people are saying it’s been the best year for Realtors. Not really, unless you’re a top listing agent. Working on the buying-agent side has been very frustrating.”

She took one buyer from California on a virtual tour over FaceTime, who made an offer immediately, and well over asking price.

That’s great for sellers and listing agents, she admits, “but I’m having concerns. What are working people going to do? If you haven’t made money in real estate, it’s very hard to buy in now.”

Locally, in her Amherst-area market, “it could affect people who apply to UMass because professors don’t want to live far away and teach; they want to live in a 20-mile radius,” she noted. “But South Hadley’s expensive, Belchertown’s exploding, Hadley … forget it, and Northampton’s out of sight.”

The pricing has forced some creativity, to say the least, Nancy said. “People are waiving inspections; that’s scary to me. And I’m seeing an awful lot of parents step up to the plate and help. They say, ‘I’d rather help my kids when my eyes are open, rather than having them get it when I’m gone, and I don’t get to see the joy.’

Amy (left) and Nancy Hamel say they’ve never seen home prices where they are now

Amy (left) and Nancy Hamel say they’ve never seen home prices where they are now, sometimes selling close to $100,000 over the asking price.

“I’m grateful — we’re lucky to be a listing agency,” she went on. “But a lot of my colleagues are disappointed they’re in this feeding frenzy. If they’re new and working with buyers, it’s a lot of work to place an offer — a lot of paperwork, disclosures, everyone has to sign, get pre-approval … to do all that work just to be disappointed. The feeding frenzy is just cuckoo.”

 

Shifting Sands

Cheryl Malandrinos, president of the Realtor Assoc. of Pioneer Valley (RAPV), said the pandemic caused people to look differently at how they work and, in turn, where they live.

“They decided they didn’t really need to live as close to their offices if they were going to be able to stay remote for the time being. So we’ve definitely seen a shift here,” she told BusinessWest. “We did see buyers from the outside area, from other states, come into the Valley as well. So we continue to struggle with low inventory and rising prices throughout. The reality is, we haven’t been able to produce housing for quite some time. That has not helped us any.”

At the end of 2021, inventory in the region was 30% down when compared to December 2020, and prices rose about 15.4%, on average, over that same time period — which is remarkable, considering that articles like this one — discussing the same issues of a supply crunch and high selling prices — were being written a year ago, too.

One issue is that Millennials are increasingly entering the market, and they’re looking for affordable homes. “The reality is 41% of total buyers are first-time homebuyers, so entry-level homes are high demand,” Malandrinos said, and those homes aren’t being built at the rate buyers demand — especially during a lumber shortage. “It’s hard to build that first-time-homebuyer, entry-level home and make it affordable.”

“A lot of my colleagues are disappointed they’re in this feeding frenzy.”

For that reason and others, she said, Realtors and economists expect demand to continue to soar in 2022, especially with the prospect of the Fed raising interest rates. “Buyers will keep us busy in the winter season, looking for homes and hoping to secure them while the rates are still historically low, which gives them more purchasing power.”

Last year, the median price of an existing single-family home nationally jumped to an all-time high of $357,900, up 23% from 2020, according to the National Assoc. of Realtors (NAR).

“Supply-chain disruptions for building new homes and labor shortages have hindered bringing more inventory to the market,” said Lawrence Yun, NAR’s chief economist. “Therefore, housing prices continue to march higher due to the near record-low supply levels.”

Yun noted that inflation and the pace of price appreciation is expected to subside next year. At NAR’s recent Real Estate Forecast Summit, economists and housing experts agreed that inflation would likely ease in 2022 at a 4% rate, while home prices are expected to rise at a moderate pace of 5.7%.

So what does that mean for buyers? “You have to be prepared because you’re going to face a fair amount of competition in the marketplace,” Malandrinos said. “Gone are the days when you could find something and, a few days later, think about talking to a lender.

“You need to be prepared right away — engaging a Realtor as soon as possible, getting pre-approved, so you’re all set once you find what you want, because you’re not going to have time to second-guess it,” she continued. “You have to move forward with a strong offer. We’re still most likely going to see things selling over asking price, with multiple offers on properties that are well-priced.”

At the end of 2021, listings lingered on the market 22 days on average, but that number is skewed by a few outliers. “In reality, many properties are leaving the market before that.”

What she doesn’t recommend is acting out of panic — for instance, by waiving inspections. “I’m not one, in good conscience, to recommend that. Maybe you’re saying, ‘I want to hold off my inspection and reserve the right to withdraw, but don’t expect you to do any repairs.’ That’s also a way to get around that.”

 

Street-level View

Nancy Hamil has seen downtown Amherst values rise to 20% higher than similar properties in other neighborhoods, and one factor might be that migration into Western Mass. from people in urban centers who still want to live near amenities.

Lawrence Yun

“Supply-chain disruptions for building new homes and labor shortages have hindered bringing more inventory to the market. Therefore, housing prices continue to march higher due to the near record-low supply levels.”

“People covet living in downtown Amherst; they love to be able to walk places. Northampton is the same,” she said, noting that apartment rents are also on the rise, again impacted by supply and demand, and people priced out of the home-buying market needing a place to live.

“I do think affordable housing needs to stabilize to some extent because prices have gone a little beyond where I thought they would be in our area,” Amy Hamel added. “I do wonder what this year is going to be like. There are many factors that play into the market, and especially with COVID still running rampant, it’s going to be interesting to see how this year plays out.”

The pandemic did change the way homes are shown, Malandrinos said, with 2020 givijg rise to virtual tours using 360-degree videography.”

“That stayed with us and likely will continue, as it makes everyone feel safer,” she said, while noting that in-person tours are still common, though some sellers are leaning more toward open houses instead of many individual showings.

“Some people are still concerned about safety, so you have to work with your Realtor and make a plan that makes sense for you,” she noted. “Often, properties come on the market, and Realtors defer showings and have many people come in at once instead of private showings.”

It’s not unusual, she added, for those tours to have a set layout, with interested buyers entering by one door, following a path, and leaving by a different door. “As we go back to in-person showings, we’re trying to keep it as normal as possible, but as safe as possible, too.”

She pointed to the state’s Housing Choice Initiative, created a few years ago to incentivize communities to build more housing stock, as one way to increase supply.

“I really hope for a market correction so more people can afford to come into the market,” Nancy Hamel said. “I remember, when I was young, we didn’t require these huge down payments, and a house cost $50,000. Home ownership shouldn’t be only for the wealthy.”

Malandrinos agreed. “Buyers are tired,” she said. “It’s not unusual to hear, ‘my buyer lost out on their third property.’ Everyone benefits when there’s more equity in the market. I hope we get there, but we’re not there yet.”

There’s only so much comfort those words bring to people who feel they’re priced out of the kind of home they want in Western Mass.

“It’s easy for people to get frustrated, but stick with it. There is a property for you,” she added. “You need to be confident and come in with a strong offer you’re comfortable with — and hang tight.”

 

Joseph Bednar can be reached at [email protected]

Hampshire County Special Coverage

Food for Thought

Fred Gohr says the lingering pandemic may extend industry trends

Fred Gohr says the lingering pandemic may extend industry trends both positive (more outdoor dining) and negative (staffing issues).

There’s no doubt that 2021 was a better year for restaurants than 2020, which was marked by weeks of closure in the spring and strict capacity restrictions after that. Many restaurants stayed afloat with expanded takeout and outdoor seating, while looking forward to what they hoped would be a stronger 2021. But while restrictions were lifted and patrons returned last year, other issues — from a workforce shortage and supply issues to new COVID variants — kept the industry from reaching full strength. What’s on the menu in 2022 for this industry so critical to the economic health of Hampshire County? Stay tuned.

 

By Joseph Bednar and Mark Morris

 

Fred Gohr recalls thinking, a year ago, that there would be a lot of pent-up demand for eating out in 2021, and he was right.

Which is why it’s a little strange to be thinking the same thoughts again, after a persistent series of COVID-19 surges — the Omicron variant is only the latest — that kept slowing down restaurants’ progress last year.

Still, “we’ve actually done pretty well,” said Gohr, owner of Fitzwilly’s in downtown Northampton. “Fortunately, Fitzwilly’s is pretty large and kind of spread out. We put up plexiglass between all the booths, which a lot of places did; it makes guests certainly feel more comfortable.

“But all in all, 2021 was not a bad year,” he added. “It certainly had ups and downs, peaks and valleys — a few patches that were really rough — but overall, from a business level, we looked back at the end of the year and felt we did better than we thought we would at the beginning of 2021. So that was a pleasant surprise — or relief, whatever you want to call it.”

Restaurants, one of the main economic and tourism drivers in Hampshire County, certainly saw that pent-up demand manifest in 2021, especially after Memorial Day, when the state lifted the final restrictions on gatherings. Most restaurants reported strong summer business. The problem, however — and it’s a big one — came when they realized hospitality workers were leaving the field in droves, and not coming back any time soon.

“I guess the biggest challenge in 2021 was staffing. It was very, very difficult,” Gohr said. “We’re fortunate we have a core of staff who have been here a long time. Most of those folks hung in through the highs and lows and are still here.”

“Probably in late December we noticed a little slowdown because of the resurfacing of Omicron and the changing variants. But overall, it was a very good year.”

Bryan Graham, regional manager for the Bean Restaurant Group, which boasts a family of 11 eateries throughout the region, many in Hampshire County, agreed that staffing has been a challenge even for the most popular restaurants.

“All restaurants across the region are struggling to find hourly cooks, along with a few entry-level positions,” he said. “We definitely had to reshift our labor pool and are taking care of employees with more aggressive wage increases to retain them.”

Edison Yee, president of the Bean Group, agreed with that assessment of the workforce shortage. “It’s still a big part of the picture. We’re definitely focused on the future and retaining our employees, but the general application pool is way down.

“We have guys, hourly employees, with longevity, who love this group, but when someone is offering a $4 hourly increase to them, they have to jump ship a lot of times, unfortunately,” Yee added. “We’ve been giving more increases to employees in the past six months than in prior years.”

The problem has been exacerbated by Omicron, which has kept many employees out of work at establishments around the region, forcing some restaurants to reduce hours or even close for certain days.

All of this affects the bottom line, but so does another global economic issue currently impacting not only restaurants, but industries of all types: supply shortages and costs. For restaurants, that largely means food products, but affects paper products and other supplies as well, Graham said, and it sometimes forces eateries to switch menu items or ingredient brands to keep up with price fluctuations and availability.

Bryan Graham says there’s often “no rhyme or reason”

Bryan Graham says there’s often “no rhyme or reason” to what products will be harder or more expensive to obtain.

“Products have definitely increased in price. As far as supply goes, it’s hit or miss. We’re still seeing shortages on some of your higher-end meats — prime meats are definitely a little scarce to come by and very expensive — but some other products have come back down in price. There’s no rhyme or reason to it — just the trucking-industry delivery windows of these vendors getting their products in.”

Still, overall in 2021, “we did see a good recovery, with most of our restaurants operating at 2019 levels or a little bit below,” Yee said. “I think we saw a good amount of pent-up demand in 2021, especially in the latter part of the year; through the summer and into fall, we were really busy, traffic-wise. Probably in late December we noticed a little slowdown because of the resurfacing of Omicron and the changing variants. But overall, it was a very good year for our restaurant group in Hampshire County.”

 

Takeout Takes Off

Amit Kanoujia, general manager of the India House in Northampton, said the pandemic has taught everyone to be nimble and to roll with the punches. His recent renovation of the India House came as the result of winning a liquor-license lottery; when the Sierra Grille closed, that license became available. Kanoujia entered the lottery and, to his great surprise, won, calling it a blessing in many forms.

“Before the vaccines were widely available, we were only doing takeout, so that’s when we considered remodeling,” he said. “When we won the liquor license, we now had to install a bar, so we did a once-in-a-lifetime renovation of the restaurant.”

Kanoujia, like other restaurants, is also facing a shortage of help, noting that his ‘help wanted’ sign has been up since April. And because he has had to rely so much on takeout business, he said the costs for supplies used for takeout meals has skyrocketed. “The same containers I used to buy for $35 a case now cost $100, and that’s if I pick them up myself.”

Another problem is finding the right supplies. Kanoujia pointed out not all containers are equal, just like not all cuisines are equal.

“Our food is curry-based, so I need to use containers that will hold the heat and not scald the person handling it,” he said, adding that he’s grateful Northampton has backed off a proposed ban on plastic takeout supplies for now, because supply-chain issues often make plastic the only available choice.

He’s far from the only restaurateur who made a hard pivot into takeout over the past two years. At Fitzwilly’s, takeout service, never a major factor in the business, morphed into a significant part of the model, accounting for about 25% of sales at its peak, when indoor capacity was restricted. While those restrictions were still in play, other restaurants relied even more heavily on pick-up service — 75% or more, in some cases — because they don’t have the interior space or outdoor-dining opportunities that Fitzwilly’s has.

To move outdoors, as many Hampshire County establishments did, Gohr rented a large parking lot next door in 2020 and used it for tented outdoor dining, seating up to 70 patrons under the tent. The option proved so successful, he returned to it in 2021 — and wants to keep doing so, if possible.

“For the last two summers, state’s ABCC [Alcoholic Beverage Control Commission] made it much easier to get an extension of the premises necessary to make that happen, so I’m talking to the [city] License Commission and ABCC now to make sure we can do that,” he explained. “I’ve already talked to the fellow that owns the parking and have his blessing. Now it’s in the hands of the License Commission and ABCC.”

Gohr noted that restaurants that remained closed the longest during the peak of the pandemic may be finding it more difficult to secure and retain staff now. “We got up and running fairly quickly with takeout back in the spring 2020, and when it was outdoor dining only, we kept the tables under the tent pretty full and kept our staff busy. Folks who weren’t able to do that are probably having a little more difficult time now with staff.”

Across Main Street from Fitzwilly’s, a handful of restaurants teamed up last year, with the city’s blessing, on an initiative called Summer on Strong, closing off a section of Strong Avenue to traffic and setting up tables on the street. It was a huge success, packing the road each night.

Inside restaurants, patrons in Northampton, Amherst, South Hadley, and other communities have had to continue wearing masks under mandates that have never really loosened over the past two years, Graham said. But he noted that the college students who make up much of the region’s restaurant business are already used to wearing masks to live and study on campus, and other patrons have been gracious about understanding the need for them.

“We do provide masks for those who don’t have one; we’ll hand them out,” he said. “But we haven’t run into too many problems in that area.”

Yee agreed. “Customers have been really working with us and understanding for the most part. We haven’t had too many disgruntled customers over the mask situation — very few of them.”

 

Welcome Mat

During the holiday season, the Greater Northampton Chamber of Commerce and the Amherst Area Chamber of Commerce promoted their local restaurants — and retailers and service businesses as well — with gift-card programs (and, in Amherst’s case, a gift-card-matching promotion).

After all, anything that helps the county’s restaurants bounce back from an Omicron-infused winter will be welcome.

“The last few weeks with the new variant certainly slowed us down considerably,” Gohr said. “But January and February, after the holidays, are always a quieter time for us, and for Northampton in general.”

After that? Well, he’s hoping to see another winter of pent-up demand manifest at his tables.

“We had a good ’21, I think. The Omicron variant is at the forefront of people’s minds, but once we get through that, barring another variant, the spring and into summer should be good.”

 

Joseph Bednar can be reached at [email protected]

Insurance Special Coverage

Come Together

Timm Marini

Timm Marini says HUB has become more “laser-focused” in the way it grows.

If you think you’ve seen more headlines than usual lately about insurance agencies being bought and sold, you’re not mistaken. In fact, 2021 was the fifth straight record-setting year for M&A activity in the insurance world. The reasons range from federal fiscal trends to a desire to broaden an agency’s expertise; from pandemic fatigue to the aging of the Baby Boomers who built and grew many of these firms. The idea, area leaders say, is to grow strategically, with customer service and company culture at front of mind.

HUB International is no stranger to mergers and acquisitions in the insurance world; they have long been a key element of the company’s growth, nationally and globally.

“For us and some of the bigger acquirers, we’re getting more laser-focused in what we do,” said Timm Marini, president of HUB International New England. “It used to be you acquired to grow — and grow profitably. And then it became geographic expansion, where you wanted to find some agencies in places where you weren’t.

“In the last 18 to 24 months, it’s gotten more laser-like,” he went on. “When I say that, I mean looking for specialists or looking for specialty shops that may bring in different disciplines, like medical malpractice, life sciences, startup companies, or financial services. In the last two years, we’ve acquired 50 investment firms across the country, four or five of them in New England alone.”

Still, even at a firm with that kind of record, the sheer pace of M&A activity in recent years has been striking, Marini said. Last year, a record 798 insurance agencies were sold in the U.S. — breaking the previous records of 711 in 2020, 653 in 2019, 580 in 2018, and 557 in 2017.

“Part of that was the pending increase in taxes — people were nervous the tax rate was going to go up significantly, and that may have given some of them the impetus to sell,” he noted.

Phil Trem, president of Financial Advisory for Marsh Berry, a leading M&A advisory firm for the insurance industry, noted the same dynamic.

“The heightened activity can be traced back to a number of different factors. Firms who sold believed that they might be negatively impacted by a potential federal capital-gains tax increase and a shift in expectations by the insured community,” he wrote on the firm’s blog. “While tax legislation was not enacted in 2021, there are still looming concerns that it could happen at some point in 2022. Will it be retroactive? Anything is possible, but at this point concern about a significant tax increase has waned.”

But other factors have been in play as well, Marini said. “I also think there’s some COVID fatigue in the marketplace, folks dealing with all the extra issues we’ve all had to deal with. Plus, honestly, the multiples folks are paying for these companies are significant.”

John Dowd, president and CEO of the Dowd Agencies, agreed, calling the current landscape a “feeding frenzy” marked by “irrational exuberance” on the part of buyers. “We look at what’s a good fit, what’s a fair price. We’re not going to chase.”

Dowd, whose own firm has made some key additions recently (more on that later), sees a demographic shift in play as well.

“Baby Boomers, who built this modern-day economy and have been a powerful force in every industry across the country, have been retiring to the tune of 2 or 3 million a year. That obviously includes every segment of the economy, including insurance agencies,” he noted. “A lot of agency owners have reached the point of retirement, and if they don’t have an internal succession or perpetuation plan in place, they might look to sell to somebody. That’s what’s going on out there.”

John Dowd

John Dowd

“A lot of agency owners have reached the point of retirement, and if they don’t have an internal succession or perpetuation plan in place, they might look to sell to somebody.”

As for that feeding frenzy, Dowd and Marini both noted that agencies are being sold for multiples of the EBITDA (earnings before interest, tax, depreciation, and amortization) valuation formula that would have been uncommon just a decade ago.

“Our business models haven’t changed, so why have these multiples suddenly gone so much higher?” Dowd wondered. “It’s causing people to maybe sell sooner than they had planned, thinking the multiples will go away sometime, and they don’t want to miss out on an opportunity to monetize their asset.”

 

Pathways to Growth

There are two ways of growing an insurance company, Dowd told BusinessWest. One is organic.

“That’s what we do every day, trying to attract more customers and certainly hold onto and retain those we already have,” he said. “Then there’s growth through acquisition. Our philosophy and strategy is to do both. Any business plan is going to focus on growth, profitability, and retention. When you put together your growth plan and have a healthy balance of organic growth and growth through acquisition at a pace you can accommodate and not stress your staff and your balance sheet, that’s what we consider a good, strong, healthy philosophy for growth.”

Marini said HUB has made targeted investments in niche-specific talent as a way to better serve customers, but has also not shied away from acquiring good-sized firms in the region — like the Insurance Center of New England in 2019, a move he called a strong “cultural mesh” at the time, similar to the one HUB found when it acquired his former firm, Field Eddy, five years earlier.

Over the past year or so, the Dowd Agencies acquired two local agencies, J. Raymond Lussier Insurance and Wilcox Insurance Agency, citing a similar cultural fit.

“When I talk about a good fit, it’s book of business, carrier representation, geographic location, and, most important, cultural fit,” Dowd said. “By that, I mean, are the current owners sharing the same philosophy that we have in terms of how they treat clients and how they treat staff? When there’s a good match in those two areas from a cultural standpoint, we can begin to move forward with analyzing the proposal that’s on the table.

“Not every prospective agency is a good fit for acquisition,” he went on. “We know the metrics we look for, and we have to check the boxes before we start to move forward. We can’t grow for the sake of growing; we have to do it incrementally and selectively. That’s our philosophy. We see people out there acquiring agencies all over the place; they’ve got their own philosophy, and we have ours.”

Elaborating, he called Lussier and Wilcox good examples of strong cultural fits. “We’ve known these owners for years. We know how important a priority their customers were. It was very important to these owners that their clients, who they worked very hard to build over the years, are going to be well cared for by the new owners, treated similarly and respected and serviced at the level they had become accustomed to.

Phil Trem

Phil Trem

“The build-versus-join decision is bringing a lot of firms to the deal table. This dynamic is not going away, and the market will likely continue to be very robust.”

“The proof is in the pudding,” Dowd added. “Lussier came on a year ago, and Wilcox was six months ago, and they have blended beautifully with our staff. We’ve had some get-togethers as a team where everyone gets to meet and know one another.

“That careful vetting is really important so there’s not any disruption to service to clients, that it’s seamless and smooth, and everyone is comfortable,” he went on, “because people get anxious when there’s change. It’s natural. To the extent we can, we want to address and dispel those concerns before, during, and after the transition. And it’s worked well.”

A larger agency with a broader range of specific expertise is important to customers these days, Marini said.

“Customers are demanding more service for the same dollar amount,” he noted. “And then, industry experts who know the nuances of different coverages can negotiate better premium deals with their carriers.”

It’s a win-win, in other words.

“One major driver of sellers coming to the table is evolving expectations of brokers’ clients, the buyers of insurance,” Trem wrote. “Since the beginning of the pandemic, insureds have created an expectation that their broker act as a consultant, not just someone who helps purchase insurance coverages. The end client is looking for someone who can help provide strategic guidance, risk management, and/or mitigation services.

“This creates a conundrum for insurance brokers who must keep investing in tools, resources, and talent in order to effectively compete,” he went on. “Independent brokers have to decide whether they want to use their cash flow to make these investments or partner with a firm that has already done it. The build-versus-join decision is bringing a lot of firms to the deal table. This dynamic is not going away, and the market will likely continue to be very robust.”

 

Bigger and Better

Building broader and deeper expertise in an insurance agency is one way to counter the bottom-line-focused direct writers, Marini said, especially on the personal-lines side, where they continue to grow market share in New England. And not just expertise, but relationships.

“We don’t want to be big just to be big; that thinking was 10 or 15 years ago. Now it’s getting big to be good, or just being good … and part of that model is having independent expertise, services, and claim advocacy like never before.”

He noted that HUB has won some national awards for its COVID-related communication about how the industry should react and deal with all the different challenges the pandemic has wrought. “We’ve had some competing brokers, large companies, bigger than us, grabbing those materials for their customers. We didn’t protect it; we shared it.”

Dowd agreed that M&A activity often focuses on what it brings to customers, from a broader carrier mix to specific expertise. While the mergers with Lussier and Wilcox focused more on the shared culture, he added, any benefit to customers is a factor when considering an acquisition.

Nationally, those mergers and acquisitions will continue to be a major story in the insurance world. After five straight years of setting new records for M&A activity, Trem doesn’t see a major slowdown in 2022.

“Buyers and investors are continuing to push their way into the marketplace,” he wrote. “If anything, the pandemic reminded the financial community what a great investment the insurance distribution space is and that demand is greater than ever before. It is a very favorable seller’s market because there is still more demand than there is quality supply.”

 

Joseph Bednar can be reached at [email protected]

Commercial Real Estate Special Coverage

Activity Report

 

Mitch Bolotin, left, and partner Kevin Morin

Mitch Bolotin, left, and partner Kevin Morin stand near the entrance to 11 Interstate Dr. in West Springfield, which recently welcomed a new tenant, Millipore Sigma, which absorbed 27,000 square feet in the office building.

Looking back, area commercial real-estate brokers, managers, and developers said 2021 was a busy year with activity across all sectors and especially the retail side and the white-hot industrial segment of the market. On the office side, there was less movement and more question marks due to COVID-19 and uncertainty about when and under what circumstances workers will return to the office. The expectation for 2022 is for more of all of the above.

Area commercial real-estate brokers, developers, and property managers spoke with one voice when they told BusinessWest that there can be activity in their sector — and sometimes lots of activity — even when the economy is not hitting on all cylinders.

And this fact of life certainly helps explain why most brokers said 2021, year two of the pandemic, was one of the busiest years they’ve seen recently.

Indeed, there were some business closures and companies moving on from their leases, said those we spoke with, and other businesses downsizing for one of many reasons — all of which created movement in the market.

But there were many other forces contributing to this movement, and most of them were positive, said Mitch Bolotin, a principal and vice president of Springfield-based Colebrook Realty Services.

Listing them, he noted everything from low interest rates to the continued growth of the state’s cannabis industry, which has been absorbing industrial and retail space in communities across the region; from the improved health of the manufacturing sector, which has also contributed to the white-hot market for industrial spaces (more on that later), to the continued growth of delivery and warehousing operations, which has created ever more demand for those spaces. There’s has also been a noticeable increase in the amount of entrepreneurial activity in the region, inspired in part by COVID-19, which has created interest in retail space and some of the restaurants that have fallen victim to the pandemic.

“There is going to be some creative reuse of office space, and retail space, in this region.”

“This past year was one of our busiest years, and there was a lot of activity on all ends of the marketplace,” Bolotin said. “We’ve had deals in the retail world, the industrial market has been very active, the office market has been active, and there have been some development deals. We’ve seen it all across the board.”

Evan Plotkin, president of Springfield-based NAI Plotkin, agreed, noting that some of the movement on the retail side and office side has been as a result of COVID and its ill effects, but there has been positive movement as well, especially on the industrial and multi-family residential sides of the ledger, where the laws of supply and demand have forced prices higher as competition for available properties escalates.

There has even been some movement in the office market, said those we spoke with, but overall, this is the category still clouded by question marks. Large question marks.

Indeed, while all those we spoke with expressed the opinion (and we’ll paraphrase) that many workers now toiling remotely will eventually return to the office because employers realize there is more and better collaboration and more productivity when a team is in one place, there was also something approaching general consensus that things won’t be like they were before the pandemic.

And this means that some office space — just how much comprises one of those question marks — must be repurposed.

“There is going to be some creative reuse of office space, and retail space, in this region,” said Ken Vincunas, president of Agawam-based Development Associates. “I don’t know want it’s going to be or who is going to do it, but the malls and some office buildings are going to turn into something that no one foresaw, something they weren’t designed for.”

Paul Stelzer, president of Holyoke-based Appleton Corp., which currently manages more than 2 million square feet of property in the region, agreed.

Citing a movement to convert large amounts of office space to lab facilities in Boston, Cambridge, and Worcester to feed a biotech sector ravenously hungry for space, he said this might be one possible course for Western Mass. … if it can attract workers for that sector.

“We need to look at how we can maybe take two floors of a building that might never be leased again and convert to some type of bio, some type of medical, some type of related spaces,” he said, “because when you talk about quality of life, we have an incredible quality of life here in Western Mass., and I think there’s some desire for people not to be going up and down a 30-story elevator every day or taking the subway to work.”

For this issue, BusnessWest talked at length with area brokers and property managers about the current scene and what they project for the future, both short- and long-term.

 

Moving Story

As he talked about the commercial real-estate market and the year that was, Bolotin said there was considerable movement across the region — and in all sectors.

And he pointed to properties Colebrook handled in 2021 — and is still handling in many cases — as evidence. The portfolio includes:

• The leasing of 27,000 square feet at 11 Interstate Dr. in West Springfield to Millipore Sigma. The company, a life-sciences R&D firm and subsidiary of Merck, was in a small office in Wilbraham and expanded into the space;

• The sale of the industrial property at 2024 Westover Road in Chicopee, one of many such properties that saw considerable interest, went fast, and sold for a good price;

• The successful leasing of the property at 95 Elm St. in West Springfield, formerly home to United Bank. The large office complex is home to a broad mix of tenants, including Tandem Bagel;

• The sale of 100 Water St. in Holyoke, a large former mill complex, to GFI, one of the many cannabis companies that now call Holyoke home;

• The sale of 5 South Maple St. in Hadley, once a PeoplesBank branch, a sign of continued movement in the retail market;

• The sale of the former Troy Industries property on Capital Drive in West Springfield; and

• The sale of the 68,368-square-foot, fully leased warehouse space at 87-147 Avocado St. in Springfield to Woodrow Studios LLC, a deal that closed roughly a month ago. “That’s an example of an industrial investment property that had a strong amount of activity,” Bolotin said.

Collectively, these transactions speak to those many forces mentioned earlier — everything from the cannabis sector to tremendous growth of warehousing, distribution, and delivery businesses to growth within the manufacturing sector — that made 2021 one of the busiest years the company has seen recently.

“And 2022 is shaping up to be more of the same,” he told BusinessWest. “There’s a lot of demand, a lot of positive activity; we see the market being resilient, and, overall, there is a good deal of optimism.”

Plotkin agreed, citing his company’s portfolio of activity in 2021 as more evidence of what has been happening, even with some sectors struggling to fully recover from the pandemic and its many side effects.

Paul Stelzer

Paul Stelzer

“We need to look at how we can maybe take two floors of a building that might never be leased again and convert to some type of bio, some type of medical, some type of related spaces, because when you talk about quality of life, we have an incredible quality of life here in Western Mass., and I think there’s some desire for people not to be going up and down a 30-story elevator every day or taking the subway to work.”

On the industrial side, the company handled the sale of a large property in South Deerfield being leased by Yankee Candle, and Plotkin said it continues to receive calls from companies actively seeking warehouse or light manufacturing space with highway access in Springfield and surrounding towns.

On the retail side, it handled a number of transactions, from the former Hafey Funeral Home in Springfield to the former Manchester Hardware store in Easthampton to the Golf Acres recreational facility in Westfield. It is also negotiating the sale of a large shopping center in Pittsfield. There has been less activity on the office side, but the company did handle the sale of 480 Hampden St. in Holyoke to Girls Inc., among other deals, and has handled several leases and a few sales for companies reorganizing or downsizing space.

Overall, the two sectors seeing perhaps the most activity are retail and industrial, said those we spoke with, with cannabis impacting both in a positive way, although there are other factors as well.

Pat Goggins, president of Goggins Realty in Northampton, said the cannabis sector has certainly helped that city’s downtown, one that has seen several stores close due to the retirement of long-time owners, but also complications from COVID. But there have been other types of entrepreneurial activity, including some new restaurants and clothing stores.

Overall, he said it was certainly a much more “nervous time” in Northampton a year or so ago as vacancies started piling up in and around the downtown in a way that hadn’t been seen in decades, and there was uncertainty concerning when and under what circumstances those vacancies would be filled. Now, with many of those storefronts leased or under contract, including the Silverscape Designs property, there is far more stability.

“We’re making some nice progress in the level of activity that we’re seeing downtown, and it’s something that more closely mimics what we had been accustomed to,” he said, adding that, while there are still some vacant storefronts to be addressed, the overall tone is much more positive than it was a year or 18 months ago.

Plotkin agreed, noting that, overall, while retailers are seeing increasingly higher volumes of online sales, most of them still need a bricks-and-mortar presence, and this is contributing to ongoing movement in that segment of the market.

Ken Vincunas says the market for industrial properties is white hot

Ken Vincunas says the market for industrial properties is white hot, with immense competition for available properties pushing prices higher.

“They may shop for something online, but they want to go to the store to try it on,” he explained. “And that’s why I believe retail will remain strong.”

But it is the industrial market that is seeing the most activity, said Bolotin and others — and it would see considerably more if there was inventory.

At present, there isn’t much, said Vincunas, noting that what exists generally goes quickly and at high prices, which makes this category much like the residential real-estate market (see story on page 6).

“The industrial market has very little inventory, and for the few things that come up, there are a lot of takers, and the pricing has increased significantly, because people have products that people want, they’re making money, and they need that new building,” he said. “There’s been a lot of demand, things don’t stay on the market for long, and prices are way up.”

“There’s a lot of demand, a lot of positive activity; we see the market being resilient, and, overall, there is a good deal of optimism.”

As just one example, he cited the former home of Work Opportunity Center in Agawam, an 18,000-square-foot industrial space, which was under contract just a few weeks after it went on the market. Many other properties have moved in similarly quick fashion, and at prices — and here’s another parallel to the residential housing market — that have prompted buyers to also become sellers.

“We’re actually selling properties, which we hardly ever do, because the pricing is so high that you have to take some chips off the table and reposition the properties you want versus the ones that are in your past,” Vincunas said, noting that the company is in the process of selling a multi-tenant property in Chicopee.

“The price seemed right, and we thought it maybe it was time to change that in for something else,” he explained, adding that many property owners are thinking along similar lines to take advantage of the white-hot market.

 

Space Exploration

As noted earlier, it’s the region’s office market that has perhaps struggled the most, and it’s the one confronting an uncertain future.

Vincunas, whose company manages several office facilities, including the Greenfield Corporate Center, said the past 23 months have been a struggle on many levels, especially as companies find new ways to do business, with many employees working remotely.

Like others we spoke with, he believes employers will eventually bring workers back the office, for reasons involving productivity, communication, efficiency, and other factors, and when that day comes, the market will see a surge in activity.

Pat Goggins

Pat Goggins

“We’re making some nice progress in the level of activity that we’re seeing downtown, and it’s something that more closely mimics what we had been accustomed to.”

In the meantime, this will remain a tenants’ market, with many of the companies looking to downsize or just reduce their monthly rent expenditure finding landlords willing to make attractive deals, another trend that is expected to continue into 2022 and perhaps beyond.

As for the longer term, those we spoke with said that some (again, how much remains to be seen) of the traditional office space in the region will need to be repurposed, and it is incumbent upon those who own and manage it to start looking at viable options.

Stelzer noted that biomed is simply one of many possible alternatives.

“We have to do a really good job moving forward of cataloging what we have available, what we can pivot, what’s available for us, what the economic-development agencies can push,” he said, “because the days of the 200-person call center or 300-person call center are probably gone.

“So we have to turn around and figure out where people have to congregate, and lab space is one of them,” he went on. “There’s also an incredible demand for social services and mental-health space, which is partly driven by COVID and partly driven by the large amount of funding available for it; you may see some of these nonprofits that would typically be in a class B space or in space that doesn’t work as nicely for them taking the plunge and coming downtown or coming to a class A building; they can afford to do it, and demand for their workers is high.”

Stelzer said he’s already seeing such movement at one of the properties managed by Appleton, the Technology Park at Springfield Technical Community College. One of its major tenants, Liberty Mutual, has moved out of most of its space in the park (47,000 square feet) — part of a larger movement to have employees work remotely — and new tenants that have moved in include Mental Health Associates and Clinical & Support Options.

Since almost the very beginning of the pandemic, Plotkin has noted that, in this region, where the office market has traditionally had a comparatively high vacancy rate, the additional stress from COVID will force some property owners to think outside the box and find new uses for their square footage.

For the building he co-owns, 1350 Main St. in Springfield, and others, he has proposed housing or perhaps a hybrid concept, what he calls a “remote-work hub,” a facility in which people would live and work.

“There would be a living space, something like a dormitory, but done in an upscale way, with a lot of amenities,” he explained. “And then you have a work hub. The idea is to have a living space and then a floor where you can lease an office, so you’re not working at your kitchen table.”

Whether the remote-work hub is the answer remains to be seen, he went on, adding that, from his view, it’s clear that something — and something imaginative — needs to happen within the office market, especially in downtown Springfield.

“We have to look at the half-million square feet of vacant office space that we have and examine how we repurpose and reposition that,” he went on. “We also need to look at what kind of help we need from MassDevelopment and the state to incentivize business owners — people like me — to take a building like 1350 Main St. and convert half of it to co-living space.”

 

Bottom Line

Looking ahead to the rest of 2022, those we spoke with said that COVID makes it difficult to project exactly what will happen. Stelzer equated the landscape in the sector to “shifting sands,” and said that, until the ground stabilizes, more uncertainty will prevail.

Overall, the experts are predicting more of the same for the foreseeable future, meaning this will continue to be a tenants’ market in the office realm, and the laws of supply demand will create more movement in the industrial and retail segments of the market.

And it means more hard thinking — and some action — when it comes to deciding what can and will happen within the office market.

In other words, it’s shaping up to be another busy year.

 

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

Law

No Breach January

By Lauren C. Ostberg

 

Along with the widely reported cyberattacks on behemoths like LinkedIn and Facebook, 2021 also saw cyberattacks on local governments, small businesses, school systems, nonprofit organizations, and other smaller, more vulnerable targets. For more than a decade, Massachusetts has enumerated a set of administrative, physical, and technological safeguards designed to protect consumer’s personal information.

“This personal information is what you are obliged to safeguard; access, use, or compromise of this personal information by an unauthorized person constitutes a reportable breach.”

For more than a decade, you — a natural person, corporation, association, partnership, or other legal entity who uses, stores, or otherwise accesses personal information in connection with the provision of goods and services or with employment — have been required by law to put such safeguards in place.

Whether a genuine desire to comply with 201 CMR 17 or the breaches of 2021 motivates you, the new year is the perfect time to strengthen your cybersecurity position with three simple steps.

 

Inventory the Personal Information You Possess

Under applicable Massachusetts law, ‘personal information’ is a Massachusetts resident’s first and last name or first initial and last name combined with a Social Security number, driver’s license or state ID number, financial-account number, or credit- or debit-card number. This personal information is what you are obliged to safeguard; access, use, or compromise of this personal information by an unauthorized person constitutes a reportable breach. A useful first step in developing, or improving, your cybersecurity position, then, is compiling a list of every location where you keep this personal information.

Creating this list should make some security risks apparent — do you have Social Security numbers in your e-mail inbox, in an unlocked filing cabinet, or stored on the desktops of employees’ unencrypted laptops? In the event you experience a ransomware attack or another cybersecurity incident, knowing where personal information was stored can help you quickly determine whether the potentially compromised data contained ‘personal information’ and, thus, whether you have experienced a ‘breach’ reportable to regulators.

If you already have a well-developed written information security program (WISP) and feel confident in your cybersecurity posture, this step still applies to you. Reviewing and updating this inventory can (and should) be part of your annual review of that WISP’s scope and effectiveness.

 

Learn to Encrypt Personal Information

Massachusetts regulators require that personal information (when held by a person other than the consumer) be encrypted ‘in transit’ and ‘at rest.’ In transit refers to information when it is transmitted across networks — say, from one e-mail account to another. At rest refers to storage, on a flash drive, laptop, etc., or on an e-mail server.

If you comply with this regulation, an employee’s lost laptop or a compromised e-mail account will not impact consumers or raise the risk of identity theft because that sensitive information should be inaccessible to unauthorized parties. Encryption can be a simple process — in some cases, it’s a matter of a few well-placed clicks. Let this year be the one you figure it out.

If you have already enabled encryption on relevant devices and accounts, and have policies requiring the encryption of personal information, congratulations. After you pat yourself on the back, make sure your employees are aware of these policies and that they knew how and when to make use of these safeguards.

 

Train on Phishing

Massachusetts’s data-security regulations require employee training as both an enumerated administrative and technical safeguard. This is because internal policies regarding access to use of, and the transportation of, personal information required by 201 CMR 17 are of limited use if they are not consistently followed company-wide.

Similarly, the best malware protection and server encryption will not protect a business whose employees hand over the proverbial keys to the kingdom by providing their credentials or downloading malware by clicking a link in a phishing e-mail.

Because individuals responding to phishing e-mails is a known vulnerability, it is a useful place to start training. Phishing, which can take the form of e-mails or phone calls, is the fraudulent practice of attempting to obtain personal information or other valuable data from a person by pretending to be a reputable, and trusted, third party. Training employees to recognize, avoid, and report these scams is an initial step (and one endorsed by the FTC) to improving your cybersecurity hygiene.

While other safeguards in 201 CMR 17 and the Attorney General’s Compliance Checklist (like two-factor authentication) are important considerations, if you inventory your personal information, enable and use encryption, and train yourself and your employees to avoid phishing scams, you will be well on your way to a breach-free January and a compliant 2022.

 

Lauren Ostberg is an attorney in Bulkley Richardson’s cybersecurity group; (413) 272-6282.

Law

A Development of Note

By Alexander J. Cerbo, Esq.

 

As COVID-19 continues to grow, mutate, and spread like a California wildfire, the Equal Employment Opportunity Commission (EEOC) has released guidance which outlines, in detail, just how COVID-19 may qualify as a ‘disability’ under the Americans with Disabilities Act (ADA).

Alexander J. Cerbo

Alexander J. Cerbo

In its recent report, the EEOC clarifies that employees who are either asymptomatic or have mild COVID symptoms that resolve in a matter of weeks are not considered disabled under the ADA. These cases are not found to substantially limit a major life activity as they do not restrict an employee’s bodily functions for a prolonged period.

However, ‘long COVID,’ or cases that persist for several weeks or even months after the initial infection, may qualify as an ADA-recognized disability. Symptoms include ongoing fatigue, brain fog, difficulty concentrating, difficulty breathing, or shortness of breath. In addition, other health conditions caused by COVID, or pre-existing health conditions exacerbated by COVID (such as heart inflammation), are considered a disability if they limit a major life activity.

The EEOC cautions that a determination as to whether an employee’s COVID-19 case constitutes a disability should always be made on a case-by-case basis.

While employers should be mindful as to how they handle employees with COVID, the ADA does provide employers with a ‘direct-threat’ defense by which an employer may require an employee with COVID, or its symptoms, to refrain from physically entering the workplace during the CDC-recommended period of isolation. An employer will risk violating the ADA if they exclude an employee from the workplace based upon “myths, fears, or stereotypes,” particularly if the individual is no longer infectious.

EEOC guidance is clear that an employer does not automatically violate the ADA in taking adverse action against an employee if they have COVID-19. Employees must meet the criteria of an ‘actual’ or ‘record of’ disability to be eligible for a reasonable accommodation. An actual disability is a “physical or mental impairment which substantially limits a major life activity.” Record of a disability is when the person has a history of that disability.

Eligible employees are not automatically granted a reasonable accommodation — their disability must require it, and the accommodation requested must not pose an undue hardship on the employer. Employers may also request supporting medical documentation in determining whether to grant an employee’s accommodation request.

With COVID-19 cases on the rise once again, and the inception of the new, highly contagious Omicron variant, employers should continue to remain alert for future guidance from the federal government in this ever-evolving pandemic.

 

Alexander J. Cerbo, Esq. is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council; (413) 586-2288; [email protected]

 

Law

Sobering Advice

By Ryan O’Hara

 

Hosted any parties recently? Hosting any in the weeks ahead? Whether you’re running a business and throwing a holiday shindig for your employees, having some folks over for a festive dinner party, or watching with friends as our new-look New England Patriots win the Super Bowl (why not this year?), it’s worth pausing to consider how you might avoid the risk of liability for any guests who might have a little too much fun.

I know, I know — maybe not the most pleasant thought, but what should you expect when you invite a litigator to the function? Like it or not, when hosting any get-together where guests may imbibe, a responsible host must take a moment to consider their legal obligations.

“You don’t want to be an innovator, so erring on the side of doing what you can to make sure your guests consume alcohol responsibly, and trying to make sure everyone has safe transport home, is the best practice.”

You’re likely familiar with the concept that, under Massachusetts law, bars, restaurants, and the like can be held civilly liable for damages caused by service of alcohol to an individual whom the establishment knew (or should have known) to be intoxicated. In practical terms, when an establishment serves someone showing recognizable signs of intoxication, and that person subsequently drives drunk, gets into an accident, and hurts someone, the establishment is held responsible for those damages.

“Good, sound policy,” you note as you sagely nod along. Agreed! But what you may not be aware of is that you — yes, you — are subject to the same obligations if you host an event and choose to serve your guests alcohol. This legal concept is known as ‘social host liability,’ and has been the law of the Commonwealth since 1986, via the Supreme Judicial Court’s decision in McGuiggan v. New Eng. Tel. & Tel. Co., 398 Mass. 152 (1986).

Social host liability provides that, where a private individual serves alcohol, or makes alcohol available while effectively controlling the supply, and that alcohol is served to a person the host knew (or should have reasonably known) to be intoxicated, the host is liable for any harm caused by that guest’s ensuing drunkenness. In essence, if you choose to provide guests with alcohol, you take on the duties (and potential liability) of a bartender. So, just as in the commercial context, if you serve a drink to somebody you already know is half in the bag, and that person then drives drunk and causes harm to people or property, you may be held responsible.

So, how can you be sure to avoid this kind of harm as a host? Since McGuiggan, Massachusetts courts have examined the scope of this liability, and some guiding principles have emerged. First, you should keep a close eye on your guests’ behavior if serving alcohol. Case law has largely limited liability to service of guests showing tangible signs of intoxication — slurred or loud speech, imbalance, inappropriate behavior, and the like. As a simple rule, if you notice a guest appears drunk, you shouldn’t provide them any more alcohol and should make sure they don’t drive. This will protect the public at large, protect you, and maybe even leave a happier guest the next morning.

Second, you can make sure your party is BYOB. Case law to date strongly suggests that you cannot incur any liability for guests who consume their own alcohol, even if it’s at your house or other premises, and even if you provide the atmosphere for a wild party. As long as you’re not providing the intoxicant, you’re probably not on the hook if something bad happens. If you are going to serve your own alcohol, try to stick to single-service amounts and control the supply, so that you can gauge a guest when they take it. Providing guests with carte blanche access to an open bar or leaving out a boozy self-serve punch bowl may make for a raucous time, but it’s also the riskiest approach.

This area of the law remains relatively new and undeveloped. You don’t want to be an innovator, so erring on the side of doing what you can to make sure your guests consume alcohol responsibly, and trying to make sure everyone has safe transport home, is the best practice.

If you plan on offering cannabis to your guests, you should know that no case law exists on service of cannabis products. However, you can reasonably anticipate that cannabis will be treated under a similar analysis. The issue could be complicated by varying tolerances and delayed onset of intoxicating effects, as well as differing impact if combined with alcohol. So, be extremely cautious if providing cannabis products (particularly edibles), especially to guests who have been drinking, or in any way appear intoxicated.

In short, a mindful, practical approach to alcohol service at private functions is good practice, period. No one wants to be a buzzkill; however, a little restraint and consideration makes for a great host — and a great guest, too. Most importantly, it will avert avoidable harm to your guests and the public, and any liability for yourself.

Note: this article is not intended to convey specific legal advice or to create an attorney-client relationship, and is provided for informational purposes only.

And, with that, cheers to a new year!

 

Ryan O’Hara is an associate with Bacon Wilson, P.C. and a member of the firm’s litigation team. His legal practice encompasses virtually all aspects of litigation, including contract and business matters, landlord-tenant issues, land-use and real-estate litigation, and accidents and injuries; (413) 781-0560;
[email protected]

 

Health Care

Speaking from Experience

By Elizabeth Sears

 

Dallas Clark

Dallas Clark says lived experience and empathy are key to what makes recovery coaches so effective.

Dallas Clark is in the business of spreading empathy and sharing hope. 

He is a recovery coach in the Recovery Coaching program at MHA’s BestLife Emotional Health and Wellness Center in Springfield. Inspired by the positive influence his own recovery coach had on him, Clark helps individuals who are facing the challenges of addiction to meet their goals and connect back into the community. 

A recovery coach is someone who has gone through the recovery process themselves and has completed the certifications required to become a coach. They act as a bridge to recovery, a ‘concierge’ of sorts, helping clients take control and regain power in their lives by providing them with wellness plans, encouragement, and other forms of assistance.

This model of treatment works because of the trust that is built between coaches and clients. Due to walking a similar path, recovery coaches are able to understand the experiences and emotions of their clients in a way others without such life experience cannot. They know what it is like to have an addiction and can connect on a personal level with someone looking to begin their own recovery. 

“The peer-to-peer counseling that recovery coaches provide is a very vital part of the process.”

“One thing that’s important about being a recovery coach is that we have lived experience. When we talk about empathy, we’ve been in those shoes,” Clark said. “I know it’s very important that you be supported by somebody that really does understand what you’re saying.”

Tommy Smyth, another recovery coach in the program, echoed this sentiment.

“The peer-to-peer counseling that recovery coaches provide is a very vital part of the process in terms of offering the comfort level of a shared experience,” he noted. “We are among the first supports someone beginning recovery encounters and often where they begin to trust the process. I continue to meet with them in addition to whoever and whatever else becomes part of their recovery.”

Recovery coaches help to motivate, support, and empower clients in a way that meets their specific needs. This help sometimes involves providing referrals. Clark recalled recently helping one of his clients find a primary-care physician and helping others with goals like finding a dentist or changing medications. 

Tommy Smyth

Tommy Smyth says no one should feel stigma or shame about seeking treatment for addiction.

Other times, recovery coaches help individuals communicate with their family, assist in building a broad support team, and provide resources for family members who may feel helpless. Whatever the case, clients are met exactly where they are in their recovery process, whether in the very early stages or further along. 

“We collaborate on a wellness plan, prioritizing goals and building on individual strengths to empower their recovery. It is their recovery,” Smyth said. “I can use my recovery as an example and in understanding what they are dealing with or feeling, but recovery is about giving power back to the individual to take charge of their healing and eventually their lives.”

 

Meeting a Growing Need

MHA’s Recovery Coaching program launched on Feb. 17, 2020 — less than a month before the World Health Organization declared COVID-19 a pandemic. The inability to meet clients in person proved to be a noteworthy obstacle for coaches to try to overcome, as well as trying to bring clients back into a community that was shut down.

“The major issue was not having the one-on-one connection because recovery coaching is really based on relationship building. Not being in-person and getting to meet the individual, it was hard to build a strong relationship over the phone,” Clark said. “It was a lot of meetings being on Zoom. A lot of people didn’t know how to use Zoom, so that was a difficult part, and just connecting people back into the community.”

However, the pandemic’s impact did not mean a slow start for the program. There was only one coach at the time of its initial launch, but an immediately full caseload emphasized a need to add more staff. Since then, MHA has added four certified recovery coaches for a total of five coaches in the program. They are continuing to expand, planning to take on more coaches as needed.

“We’re starting to build collaborations with other agencies, which are providing more referrals for us, so that’s one reason we’re expanding the Recovery Coaching program,” Clark said.

The program has now shifted to a hybrid format, offering a combination of in-person and remote coaching. Also, the impact of certain resources reopening after previously closing during the pandemic has been felt greatly by members of the program. 

“We’re getting back to that place now where recovery centers are back open. Drop-off centers are back open, and that’s a big plus because, when the pandemic hit, a lot of places had shut down that are recovery-oriented,” Clark said. “People didn’t have those safe places to turn to.”

Smyth spoke on the recent death of Jimmy Hayes, an NHL hockey player from Massachusetts who died from a combination of fentanyl and cocaine. Hayes’s father expressed fear of the media portraying his son as a “junkie.” In response to this, Smyth emphasized the importance of treating individuals who experience addiction with empathy and dignity, as well as providing them with the help they need. 

“If you want to get help, there are people out there, including recovery coaches who have been where you are, willing to walk and fight with you. You don’t have to keep going through what you are going through alone — you can take control, and you will get your life back.”

Addiction is a disease with a gripping nature that cannot be overstated, and with the especially risky nature of drugs being laced with cheaper and more lethal substances and sold to unsuspecting buyers, resources like MHA’s Recovery Coaching program are essential for members of the community experiencing addiction, Smyth noted.

“Recovery coaches can and do make a difference. The more we can educate the public about addiction and the role recovery coaches can play, the better,” he said. “No one should be stigmatized or judged for having an addiction to a substance. No one should be made to feel shame, rejection, or failure in seeking treatment to start and sustain recovery.”

 

From Despair to Hope

The feelings of empathy and hope that Clark and Smyth exude can be felt in a single conversation with them. Smyth concluded with a word of encouragement for anyone seeking to regain control of their lives from an addiction. 

“If you want to get help, there are people out there, including recovery coaches who have been where you are, willing to walk and fight with you. You don’t have to keep going through what you are going through alone — you can take control, and you will get your life back.”

When asked what message he would like to leave with BusinessWest’s readers, Clark spoke, without a single hesitation, of hope.

“I think the most important part is providing that hope for others. I always tell people that I didn’t know what that looked like. I didn’t even believe in myself, but somebody believed in me. I didn’t have hope — somebody gave hope to me.”

Health Care

New Lease on Life

Daniella Grimaldi

Daniella Grimaldi says it often takes weeks for clients to warm to the program — but the results speak for themselves.

 

Daniella Grimaldi has worked with young addicts long enough to know it can happen to anyone.

“I say this to everybody: you don’t know what you don’t know about your kids. You could have the best kids in the world and raise them the right away, but all they have to do is hang out with someone who’s doing the wrong thing. That’s when kids fall behind.”

And fall, all too often, into substance abuse. That’s where Goodwin House comes in.

“We are one of the only programs like this in the state,” said Grimaldi, program director of the house in Chicopee opened by the Center for Human Development in 2017 and named after its long-time CEO, Jim Goodwin. Its clients are teenage boys, ages 13 to 17, who live there, often after a stint in detox, for 30 to 90 days in order to recover from addiction and learn the coping mechanisms and life skills they need to be successful — and remain drug-free — afterward.

“There aren’t a lot of these programs for adolescents,” she went on. “But this is the age where, if you get the help you need, you’ll be more successful than if you get the help at 30 or 40 years old and know you’ve wasted all that time engaging in substances and not getting help.

“I think it’s critical. A lot of our kiddos who leave us call us a year or two later and say, ‘I’m really thankful for the opportunity,’” Grimaldi added. “I recently talked to a kiddo who left us at beginning of 2020, and he was like, ‘Daniella, do you remember me? I’ve been sober for 399 days.’ That’s something I’m really proud of, when kids call back, and they’re proud of themselves.”

“This is the age where, if you get the help you need, you’ll be more successful than if you get the help at 30 or 40 years old and know you’ve wasted all that time.”

At first, Goodwin House focused solely on substance abuse, but earlier this year, it became ‘co-occurring enhanced,’ which means it focuses on both substance abuse and the mental-health piece. In doing so, the client-to-staff ratio shrank from 1:5 to 1:3. “We changed the ratio to better support the residents we serve, and we hired a bunch of new positions,” Grimaldi said.

Among those are a recreational therapist. “She was a teacher, so she’s always worked with adolescents. She’s able to do therapeutic relationship building with our residents and tie it all back into their therapeutic approach, which I think is awesome. You never think about how teaching clients how to play basketball together could actually be a therapeutic group. You think it’s just you out here playing with your friends; it’s just basketball — but it’s not. It’s more than that.”

Goodwin House also hired an educational liaison to help clients bridge the gap between their work at Liberty Preparatory Academy — a recovery-focused high school in Springfield they attend during their time in the program — and their normal school districts. “It makes for an easier transition; it’s not so chaotic,” Grimaldi explained.

“They don’t want to be here,” she was quick to admit. “I’ve never had a kid who really, truly wanted to physically be here, but they work the program, and then they realize it’s not as bad as they think, and they do the work so they can gain the sobriety they need.”

And then come those post-program phone calls, when Grimaldi hears them say they’re glad they stayed.

 

Busy Schedule

Clients are referred to Goodwin House from many sources, she told BusinessWest.

“It could be self-referral from the adolescent themselves, from teachers, schools, courts, the DYS system, the DCF system, or it can be from their own parents. Anyone can make a referral to Goodwin House. We accept all different types of insurance, and if we don’t accept your insurance, the biller of last resort pays — so DPH picks up cost, or DCF — so no kid is left behind and everyone is entitled to treatment.”

Goodwin House opened in 2017

Goodwin House opened in 2017 focusing solely on substance abuse, but recently became ‘co-occurring enhanced’ to focus on mental health as well.

The house’s capacity is 15 residents, although it’s running under that during the pandemic. A typical weekday has clients attending Liberty Prep, then returning for a snack and ‘room time’ so they can settle down from the day.

“Some kids don’t like school; it can be traumatic, triggering, and bring a lot of anxiety, so we let them have a cool-off period of about 30 minutes,” Grimaldi explained.

That’s followed by a strict regimen: a group therapy session, recreational therapy, dinner, chores, another clinical group, maybe a local recovery meeting with Alcoholics Anonymous or Narcotics Anonymous, then phone calls, down time, and bed.

The weekends are similar, with school replaced by recreational activities in the community, such as bowling outings. That is, as long as they’re eligible to go. The program operates on a motivational ‘level’ system, and clients progress from orientation to level 5, with more privileges the higher they go.

“If you work the program, the program works for you,” Grimaldi said. “What you’re willing to put in is what you’ll take out of it.”

Often, the residents aren’t serious about the program for the first month, she noted. “I call it the honeymoon period, or the adjustment period. Often, the work doesn’t start until 35 or 40 days in, and a lot of times that’s when you see kids really struggle with themselves and their internal issues, and they’re asking, ‘can I do this without substances, or can I not?’

“Sometimes we see kids have to return,” she added. “But a lot of times, those are the kids who are actually more successful. At first they didn’t get it, but they try it again, and it works for most of them.”

Goodwin House also encourages family engagement and involvement during the client’s stay, Grimaldi said. In fact, last month, all the families were invited to the house for Thanksgiving dinner, each family seated in a separate area so they could have a meaningful holiday together.

“I’ve never had a kid who really, truly wanted to physically be here, but they work the program, and then they realize it’s not as bad as they think, and they do the work so they can gain the sobriety they need.”

“A lot of times, a client will come to Goodwin House and will have a poor relationship with their parents. ‘Oh, my parents are mean because they put me here. My parents don’t care about me.’ We hear that all the time. So we try to work on that family relationship. We rebuild that through family therapy as well as family engagement and involvement.”

By the time clients leave, Grimaldi and her team want them to have a sponsor, be able to work their recovery, and also to have success academically. The center’s after-care coordinator keeps in touch with clients for a month after they leave, helping connect them to outside resources they can call upon to support their continued recovery.

“I’ll give them my business card, and a lot of them call me,” she added. “They’re interested in what’s happening. Sometimes it’s the kid who had the worst behaviors who wants to call back and say thanks. The one who was 399 days sober, he had a lot of incidents while he was here, but he turned it around and did what he needed to do and realized his life was worth living. And once you realize your life is worth living and there’s something to live for, your mindset changes.”

 

Breaking the Stigma

While stigma around mental health and substance abuse has lessened in society in recent years, it’s still an issue for many, especially parents of struggling teenagers — and it’s one factor keeping some families from seeking help, Grimaldi said.

“Stigma is always going to be there. But I tell parents, ‘it’s not what people think about you, it’s what you do to help your kid’ you’re the one bothered by your son being in a drug program, not him. He’s here to get the treatment he needs.”

Part of that is building life skills, she explained.

entrance to Goodwin House.

This apt message recently greeted people at the entrance to Goodwin House.

“We’re not just a substance-abuse and mental-health program. We teach them a lot of independent-living skills, all the different skills they haven’t learned at home. A lot of kiddos, when they come to us, they don’t know how to do basic chores. They were never taught.

“Or they’ve never done dinner as a whole, like we do here,” she went on. “They’re like, ‘why are we all eating together?’ They’re not used to it. It’s sad because you think, at their age, they would be used to having dinner with their family, but they’re not, so we teach them how to exist within a big, cohesive family.”

Grimaldi has some advice for families whose kids may not necessarily be struggling with addiction: talk to them before they get to that point. Because, again, it can happen to anyone.

“So many people wait until their kid gets into the worst point, when they’re in the hospital, getting stomach pumped, getting Narcan, but we shouldn’t wait until it gets to that point. We should be able to help our kids from the start, realizing there’s small changes that can happen, and those small changes lead to the bigger things.”

For example, a teenager might suddenly stop hanging out with long-time friends or engaging in a sport they’ve loved all their life.

“Instead of waiting until the school calls and says, ‘hey, your kid was caught with a cigarette,’ or ‘your kid was smoking pot up on the hill,’ be more attentive right now. There’s more to life than the busyness.”

It often starts with the most basic questions to get communication flowing between parent and child — and lessen the chances of those signs being missed.

“Ask, ‘how was your day? What did you learn today? What did you have for lunch today?’ These are basic questions parents don’t ask. I’ve seen parental visits where they just stared at each other because they don’t know how to talk to each other. They never took the time to get to know their kid. And I think it’s because people are so busy doing busy things.”

Goodwin House keeps Grimaldi plenty busy, and she loves seeing clients progress through the levels — and, more importantly, progress into sobriety and independence.

“I love my job. I love being able to work with so many different youth in such a short period of time,” she told BusinessWest. “You’re able to work with them and see where their struggles are. I love what I do because I think we make a difference, in the sense that we’re able to support them and help them gain sobriety. Even if it’s just 90 days, it’s 90 days they didn’t have before.”

Which then becomes 399 days — and counting.

Cover Story Economic Outlook

COVID Complicates Generally Optimistic Projections

A year ago, business and economic development leaders were looking beyond a surge in COVID to what they were seeing as better times — when the pandemic would be a thing of the past, the economy would rebound, and ‘normal,’ as in the life we experienced before March of 2020, would return. Most of that, especially the parts about COVID being over and returning to normal, didn’t happen. And that explains why, a year later, amidst another strong surge in COVID cases, there is quite a bit of optimism about the year ahead, but also some hedging of bets. This past year showed that we just can’t predict what will happen with this pandemic or with many of its side effects, everything from an unprecedented workforce shortage to inflation and supply chain woes, to a still white-hot housing market. In the stories that begin on page 16, area business leaders look ahead and project a year in which most all of the stern challenges from 2021, and especially the pandemic, will linger. But they also see a new and perhaps better chance to more effectively move on from COVID.

The Economy >>

Optimism Abounds, but Many Factors Make It Difficult to Project


The Region >>

There Were Glimpses of Progress in 2021, and More Are Expected


Small Business >>

Many Are Busy, But Challenges Linger as the New Year Dawns



Higher Education >>

Region’s Colleges, Universities Face More Stern Tests in 2022


Healthcare >>

The Prognosis Is for Another Year of Stern Challenges in 2022


Tourism >>

Sector Is on the Rebound, but Hospitality Still Faces Staffing Issues


Features Special Coverage

Missed Connections

It’s a widely quoted statistic that, unfortunately, hasn’t changed much in recent years — only about one-quarter of information-technology (IT) jobs are held by women, and the percentages are much less for women of color — and women in IT leadership, for that matter. That will change, those working and teaching in the field say — but only with a stronger emphasis on making not only women aware of the wide array of careers available in IT, but girls as well.

Hilary LeBrun

Hilary LeBrun says stereotypes have obscured what a rich, varied field IT is — and kept many women from exploring it.

As an associate professor of Computer Science at Elms College, Beryl Hoffman is somewhat far afield of her first chosen college major: biology.

“I had not really heard about computer science as a career at all — my high school didn’t offer it,” she told BusinessWest. “But a friend talked me into taking a coding class for fun.”

And she enjoyed it — enough to eventually push her studies in a different direction.

“As soon as I started it, I felt that, if girls had that experience early on, they would also really enjoy it,” Hoffman recalled. “What hooked me was the problem-solving aspect, plus the creativity. A lot of girls don’t get introduced to that, even after school or at home, where it’s boys gaming and building robots. Girls don’t get to experience that as much.”

That reality has no doubt contributed to a wide gender disparity in the IT world. According to data from the National Center for Women & Information Technology, women make up 47% of all employed adults in the U.S., but hold only 25% of computing roles. It’s more dire for minority women; of the 25% of women working in technology, Asian women make up just 5% of that number, while black and Hispanic women account for 3% and 1%, respectively.

“What hooked me was the problem-solving aspect, plus the creativity. A lot of girls don’t get introduced to that, even after school or at home, where it’s boys gaming and building robots.”

“It’s mostly societal expectations and stereotypes,” Hoffman said. “I do believe we need to start introducing people, especially young girls, to computer science and technology when they’re young. That’s happening more and more — I’m seeing more computer science even in elementary schools. It will change; it’s just slow. But I have been seeing slight improvements every year.”

Hilary LeBrun didn’t start out in computer science, and she certainly never thought she’d eventually be COO of Paragus IT when she was working in the hotel industry.

“I was up for a change — I wanted to work in a more family-friendly industry, and the hotel industry isn’t family-friendly. I also wanted to work for a growing company with a good culture that was doing something important. And I found it in Paragus.”

She started as an assistant to CEO Delcie Bean and was quickly excited about how the company helps other businesses — keeping networks secure, creating efficiencies, finding budget-friendly solutions for clients, and the like. She sees the wide variety of work available in IT, and the relationship-centered focus of much of it, and has thought about why more women aren’t plugging in to these careers.

Beryl Hoffman

Beryl Hoffman says one key to closing the gender gap in IT is introducing girls to computers at much earlier ages.

“Part of it is the stereotype,” LeBrun said, echoing Hoffman’s thoughts. “It’s always been this predominantly male industry, and it’s something that’s taken women a little while to get into. There’s almost a stigma around it, that it’s this geeky industry, it’s the gamers that get into it, but people aren’t seeing there’s so much more to it.”

For instance, “it can attract somebody who wants to solve problems, and also create efficiencies, even someone who wants to go into management — there are just so many different aspects. There’s a lack of awareness around that, and the ways that women — and even men — can learn and get that education, get that foot in the door.”

“It’s always been this predominantly male industry, and it’s something that’s taken women a little while to get into. There’s almost a stigma around it, that it’s this geeky industry, it’s the gamers that get into it, but people aren’t seeing there’s so much more to it.”

Zoe Alfano got her foot in the door as a college student at UConn, where she had her eyes on an engineering degree but began working in campus tech support and realized she was good at solving problems. With four years of that work experience in hand, she was hired by Paragus as a client support engineer. She cited a couple of reasons why women don’t follow a similar path.

“It depends a lot on the person, their experience. They might not have been exposed, or didn’t have someone in their lives say, ‘try it out, you might be good at it.’ Or, some people just don’t consider themselves technical; they think they’re not good at it. But they might be good at problem-solving, and solving a problem with a piece of technology isn’t a whole lot different than figuring out what’s wrong with the stove when it’s not working, or solving a math problem. Some people might be better than they anticipate, but don’t have the opportunity to try.”

Constant Change

When they do try, Alfano said, they find that it’s a field that’s constantly evolving, with always something new to learn.

“There’s such a wealth of knowledge, it’s impossible to be a jack of all trades, with so many things to specialize in. A network manager can prevent attacks. A technician like me is good at solving day-to-day issues but might not be as good at solving network-related issues. There are so many different things to know about and learn, and you always have an opportunity to learn something new and choose where want to go.”

Zoe Alfano

Zoe Alfano

“Solving a problem with a piece of technology isn’t a whole lot different than figuring out what’s wrong with the stove when it’s not working, or solving a math problem.”

That can be appealing for women who love learning and working collaboratively, she added — and, often, helping people.

“You’re able to say, ‘hey, I can help with your issue,’ and if you value getting a positive response from someone, that’s a big reason to stick with the field. You talk on the phone, and they’re so grateful their problem isn’t happening anymore. It just makes you feel good.”

LeBrun finds a gratifying challenge in how quickly IT changes.

“Even just the technology we support — 10 years ago, every company had a server. Now servers are dying; everyone’s going to the cloud,” she noted. “So we always need to adapt, always need to change, and that’s one of the aspects I love about it. The industry is not stagnant. There’s always something to learn, new technology to adapt and bring to our clients.”

Beverly Benson, IT and Security program director at Bay Path University, first became interested in the field when her own information was compromised. The more she learned about cybersecurity, the more she related it to the non-technical things people do every day to keep safe, from locking doors to watching over their kids. In short, she saw an appealing human element to a technical field.

“We do that as mothers naturally, always trying to protect our children, always checking in and protecting. I just get paid to do it,” she said. “I think it comes naturally as a woman; we’re the nurturers in a positive sense, a protective sense.”

She agreed with the others BusinessWest spoke with that more awareness of the breadth of IT careers, from the highly technical side to the more relationship-driven side, would boost the number of women interested in pursuing it. “There are a variety of careers within the field — they need to know it’s much more than coding,” she noted.

“There is a need to protect information and infrastructure in every sector,” Benson went on. “It has the potential to impact the food you eat, the vehicles that you drive, it can impact healthcare and your medical records … everyone is now living in such a connected world that there is a need to protect every aspect of our lives.”

Hoffman agreed. “It’s a really awesome field of high-growth, high-paying jobs,” she said. “Also, technology is essential in any field now. A lot of folks are missing out on the opportunities out there. And I think a lot of it starts with education. We need to let people know about these careers and have girls experience them.”

To that end, Hoffman is part of a nonprofit, Holyoke Codes, that aims to bring coding and robotics to kids in Holyoke. She also received grant to build a high-school curriculum called CSAwesome, a free e-book that teaches AP CS A and Java and is becoming more widely used in high schools.

“That’s great to see, too,” she said. “And the AP College Board has done a lot to try to get girls to take AP classes in computer science. It’s nice to see as we try to grow that pipeline, and see it broaden and become more diverse.”

Beverly Benson

Beverly Benson

“Everyone is now living in such a connected world that there is a need to protect every aspect of our lives.”

The education needs to start earlier than high school, though. “They say that most kids start thinking about careers in middle school. So we need to start educating them there,” Hoffman said, adding that girls need to see more female role models from the IT world.

“As more women go into IT, they will encourage even more women to go into IT. But it’s just slow. We should start them young — even at home, often the robotics and the computers are bought for the boys, not the girls.”

Disparities linger in school districts as well, she said, noting that suburban schools are more likely to present robust computer-science programs than urban and rural schools.

That’s a lot of factors in play, she told BusinessWest, “but it’s slowly changing.”

 

Serve and Protect

LeBrun admits IT can be an intimidating field for women, considering the gender disparity and stereotypes, and is glad she found a company in Paragus that employs — and promotes — plenty of women. She hopes others will find similarly supportive cultures.

But she also believes women need to consider how important IT is to the work world as a whole and how gratifying it can be to be a part of that.

“COVID really opened up businesses’ eyes to how important their IT is and how much they depend on it,” she said. “We try to tell our clients, ‘picking your IT firm should be as important a decision as picking your lawyer or accountant.’ We’re a partner. We’re working to protect their business.

“And I think that’s really exciting,” she added, “to be in an industry that can protect other companies so much — it just creates so many opportunities. Again, it’s about bringing that awareness to girls in school who are still trying to figure it out.”

For older women and career changers, Tech Foundry, a workforce training program affiliated with Paragus, is one example of how to create opportunity — “to just make it doable for them, because it can be scary,” LeBrun said. “There’s a lot to learn in the field.”

“A lot of people don’t realize the stereotype of a nerd in his basement, coding away, it’s not like that anymore. It takes a team to create software.”

IT companies would do well, she added, to seek employees who might not have every technical skill, but brings fresh perspectives to an organization. “They might not have the traditional background, but have the drive and personality, and the rest can be taught.”

The collaborative nature of much IT work is appealing as well, Hoffman said. “A lot of people don’t realize the stereotype of a nerd in his basement, coding away, it’s not like that anymore. It takes a team to create software.”

The IT industry is also becoming integrated into other careers, she added, from healthcare to finance. “More and more, all fields are integrating IT, so no matter what you do, those skills are going to be useful in the future, especially in Massachusetts, with so much growth in biotechnology and health sciences.”

The ability to work remotely is another plus — for many firms, a fairly recent one, Benson said.

“Because we had no other choice, we had to work remotely during the pandemic. That has opened doors of possibilities for all people, including women. You don’t have to uproot your family to move to a state heavily populated by cybersecurity opportunities. Now some organizations are OK with you working remotely.”

In short, opportunity abounds. Hopefully, the women we spoke with said, awareness will follow — and stereotypes will continue to crumble.

“I try to encourage women to give it a try,” Benson said. “My mantra is ‘dare to dream.’ I want to see more women in this field. We need them.”

 

Joseph Bednar can be reached at [email protected]

 

Law Special Coverage

What Can Business Owners and Managers Expect in 2022?

This past year was a busy one on the employment-law front, with a number of new measures and mandates for employers to follow and some emerging trends, such as unionizing activities, to watch. As the new year dawns, these matters will continue to be at the forefront, and obviously bear watching.

By John S. Gannon, Esq. and Meaghan E. Murphy, Esq.

Last year, we saw legislators and employers trying to pivot from COVID-19 safety measures to more traditional labor and employment-law issues. However, with the Delta and Omicron variants wreaking havoc across the globe, businesses and lawmakers are once again looking for ways to stop the spread of the pandemic. Here are some labor and employment highlights from 2021 that are sure to impact employers in 2022.

John Gannon

John Gannon

Meaghan Murphy

Meaghan Murphy

Employer Vaccination Mandates

In September 2021, President Biden signed several orders requiring federal employees, federal contractors, and most healthcare workers across the country to be vaccinated against COVID-19. He also instructed OSHA to develop an emergency temporary standard directing private employers with 100 or more employees to implement COVID-19 vaccine mandates or require weekly testing for their unvaccinated employees. These mandates have been challenged in courts around the county, with varying results. For example, in early December, a federal court in Georgia issued a countrywide stay of the federal-contractor vaccine mandate.

The OSHA ‘shot-or-test’ rule was similarly blocked by one court late last year, but a few weeks later, a different court ruled in favor of the Biden administration and reinstated the emergency standard. It appears the U.S. Supreme Court will have to sort all of this out, and we expect they will rule on these issues early in 2022.

“Unionization campaigns at some of the country’s largest companies have been heating up.”

Here in the Commonwealth of Massachusetts, state mandates are in place for employees working in long-term care and assisted living, certain home-care workers, and executive-level state workers (including law enforcement). Legal challenges to the vaccine mandates were filed in Massachusetts courts, but to date all of them have failed.

 

Accommodations to Vaccination

In October, the Equal Employment Opportunity Commission (EEOC) released guidance making it clear that all employers, regardless of size or industry, can require that employees receive the COVID vaccine. There is one big caveat: federal and most state laws require employers to provide reasonable accommodations for religious beliefs, disabilities, or pregnancy-related reasons. These are commonly referred to as medical and religious exemptions. Employers that are considering a mandatory vaccination program should have policies explaining how these exemptions work, as well as exemption forms ready for employees to fill out.

 

Biden Administration’s Support for Unions

In June, President Biden appointed Jennifer Abruzzo as the National Labor Relations Board’s (NLRB) new general counsel. She quickly made clear her (and the new Democratic administration’s) pro-labor stance on various issues through a series of memoranda issued by her office. Not surprisingly, Abruzzo has vowed to undo much of the NLRB’s activity under former President Trump, which tended to be pro-business.

Unionization campaigns at some of the country’s largest companies have been heating up. Employees at a Starbucks in Buffalo, N.Y. voted to unionize. Starbucks has agreed to sit down at the table and bargain with the union. This is the first time organized labor has gained a foothold in one of Starbucks’ U.S. locations, but it certainly does not seem like it will be the last. Employees at Starbucks in several other states, including Massachusetts, Washington, and Arizona, are also seeking to unionize.

In addition, employees at an Alabama Amazon warehouse recently voted not to unionize, but the union trying to organize those employees alleged that Amazon intentionally interfered with its union-organizing efforts. In one of its biggest actions under President Biden, the NLRB announced that Amazon had committed to allow more room for employees to conduct union activity and to send an e-mail directly to current and former employees to inform them of their labor rights. It is the clearest example to date of how Democratic officials in this administration will seek to use federal power to help employees organize.

 

Paid Family and Medical Leave

Starting Jan. 1, 2022, most Connecticut employees will be able to take paid time off to attend to personal and family health needs. Under the program, employees are entitled to 12 weeks of paid-leave benefits, and up to 14 weeks if an employee experiences a serious health condition that occurs during a pregnancy.

This program is similar to the Massachusetts Paid Family and Medical Leave program, which went live at the beginning of last year. The Department of Family and Medical Leave published data stating that the department approved 43,440 applications between Jan. 1 and June 30, 2021. Benefits totaling $167,915,781 were paid out during this time. This was before employees could take PFML to care for family members, which became available on July 1.

 

Employee Mobility: Tackling the Labor Shortage

A record 4.4. million Americans quit their jobs in September 2021. The high quit rates were commonly dubbed the ‘Great Resignation,’ and made it clear that Americans are switching jobs for better pay, starting their own businesses, or continuing to struggle with child care and school schedules.

As the pandemic lingers, it’s likely that the quit rates will remain high for the next several months. As a result, employers will need to raise wages and/or offer more lucrative benefit packages to attract and retain talent. Businesses should also consider offering employees who do not physically need to be in the office every day some sort of a hybrid work-from-home schedule, a model that has dramatically increased in popularity over the last year.

 

John Gannon and Meaghan Murphy are attorneys at the firm Skoler, Abbott & Presser, P.C., in Springfield; (413) 737-4753; [email protected]; [email protected]

Health Care Special Coverage

When It Can’t Wait

Mercy Medical Center

Mercy Medical Center, like all area hospitals, has seen a series of COVID surges over the past two years, including the current one.

Last month’s DPH guidance to hospitals, telling them to postpone all non-essential procedures that could result in an inpatient stay, is a challenge on multiple levels, local hospital leaders say. One, it’s not so easy to simply redeploy personnel from one department to another. Two, there’s no one-size-fits-all definition of ‘non-essential.’ But most important, it’s critical that patients seek out the care they need and let doctors make the judgment calls — and the fear is that this new guidance will chase those patients away. It wouldn’t be the first time.

It’s never good to put off necessary treatment, Spiros Hatiras said, whether that be cardiac screenings, lab tests, or cancer surgery.

“The outcome is not going to be good,” said the president and CEO of Valley Health Systems, which includes Holyoke Medical Center. Yet, that’s exactly what has happened over the past two years, due to a combination of people’s fear of public places and guidance from the hospitals themselves for people to stay home during the early height of the COVID-19 pandemic in 2020.

“People were initially scared; they wanted to stay away from the hospital,” Hatiras said. “Then we started reducing capacity and told people, essentially, ‘don’t come to the hospital.’ We started seeing people come back over the summer and fall, and now we’re back to telling people to stay away.”

He was referring to the Massachusetts Department of Public Health’s (DPH) guidance to hospitals concerning non-essential, elective, invasive procedures, which took effect Dec. 22.

“We started seeing people come back over the summer and fall, and now we’re back to telling people to stay away.”

“To preserve healthcare personnel resources, all hospitals are directed to postpone or cancel all non-essential elective procedures likely to result in inpatient admission in order to maintain and increase inpatient capacity,” the guidance reads. “Patients are reminded to still seek necessary care at their hospital or from their healthcare provider.”

The guidance comes as the Omicron variant has pushed hospitals to capacity limits with a new COVID surge.

Dr. Robert Roose

Dr. Robert Roose says treating all patients, urgent and non-urgent cases alike, is part of Mercy’s mission, but it will abide by the state’s guidance.

“Hospital capacity is stretched more than it has ever been since the beginning of the healthcare emergency,” Massachusetts Health & Hospital Assoc. (MHA) President and CEO Steve Walsh said in recent testimony to the state Legislature. “After two years of fighting this virus, our caregivers are simply exhausted.”

He acknowledged that “some of these pressures, we feel, are not COVID-related and may have also been mounting for several months.” Still, a strained healthcare workforce is facing a staffing shortage that has contributed to the loss of approximately 500 medical/surgical and ICU hospital beds since the beginning of the year.

Still, Hatiras questions the wisdom of simply assuming caregivers can be efficiently redeployed to other tasks.

“The idea is that, if we don’t do these surgeries, it opens up resources to redeploy in the hospital. But we know that’s not so easily done. You can free up nurse, but in a lot of cases, there’s not a whole lot they can do. It’s not like they can suddenly be an ER nurse or an ICU nurse. There are a lot of issues around that in terms of training and competencies. So the value of actually redeploying staff is somewhat questionable.”

He suggested what might work better is to issue the guidance as an advisory. “We can advise hospitals to find ways to create capacity. At the end of the day, there’s not a single hospital that would leave a patient untreated because they’re going to schedule a plastic surgery ahead of that patient. What we really need is more staff, which we don’t have.”

Dr. Robert Roose, medical director of Mercy Medical Center, said his team takes pride in caring for all the needs of the community, so the DPH guidance poses a challenge.

“Hospital capacity is stretched more than it has ever been since the beginning of the healthcare emergency.”

“It is important for us, from a mission perspective as well as from an operations perspective, to be able to be there when patients need us, whether for emergency care or non-emergency care,” he said. “All types of care across the continuum support individuals’ well-being and wellness.”

That said, “Governor Baker and the Department of Public Health have issued an executive order for hospitals to suspend non-emergency procedures that could result in an inpatient stay. In order for us to fulfill our obligations as a hospital, we are, of course, complying with those orders. We recognize this can be a concern for patients, as well as our providers and colleagues who wish to continue to provide the care they are so expertly trained to do. This is not an ideal situation, but one we find ourselves in, and we look forward to resuming all care in the very near future.”

 

What Is Non-essential?

To help redirect resources, Gov. Charlie Baker activated the Massachusetts National Guard on Dec. 22 to address the non-clinical support needs of hospitals and transport systems. Up to 300 of these Guard members will support 55 acute-care hospitals, as well as 12 ambulance service providers across the Commonwealth.

DPH surveyed hospitals and ambulance service providers and, in concert with the MHA, identified five key roles that non-clinical Guard personnel can serve in support hospital operations for up to 90 days: driving ambulances used to transfer patients between two healthcare locations, such as when patients are discharged from a hospital and transferred to a long-term-care facility; providing continuous or frequent observation of a patient who is at risk for harm to themselves; helping to maintain a safe workplace; bringing patients via wheelchair or, if needed, stretcher, from their patient room to tests such as X-ray or CT scan, or from the emergency department to their inpatient floor; and delivering patient meals to their rooms.

Spiros Hatiras says very few procedures can be deemed non-essential when one considers the health effects of delaying them.

But if resources are, indeed, being directed away from non-essential procedures, the question becomes what, exactly, constitutes a non-essential procedure. And the answer, in many cases, is complicated.

“The decision of what can be safely postponed, even for a week or three or four, is left to the discretion of the surgeon or clinical team,” Roose said. “That is an incredibly important fact because, ultimately, the providers are the ones responsible for the care of the patient, and we never want to see something untoward occur during the period of time when they could have been attended to. At Mercy, just like at other hospitals, those decisions are made by the treating providers and patients in collaboration, with their best interest in mind.”

Hatiras agreed. “When we talk about necessary procedures, first of all, there’s no particular approach; every individual is different. If you think about it, there are very few procedures where postponing it enhances one’s health. We’re talking about surgery here. When somebody gets to the point where they need surgery, it’s not like getting a haircut, where it can wait until next month.”

Exceptions to this rule might include discretionary plastic surgery and perhaps Lasik, where the worst-case scenario might be a few more months of wearing glasses or contacts.

“But that’s about the only things I can think of,” Hatiras said. “With other things, you’re doing it because you’re in pain or your health is deteriorating in some way.”

Take bariatric surgery, which some people might put in the non-essential category. Those patients start the process six months before surgery and tackle issues such as diabetes and blood pressure — “all the issues that make COVID deadlier,” Hatiras said. They typically have to lose a certain amount of weight before surgery and undergo psychological screening and counseling.

“When they meet all the milestones and the date approaches where they’re ready for surgery, should we now tell them, ‘guess what? We can’t do your surgery; we’ll let you know when we can.’ That would be wholly detrimental to the patient, who worked for six months to get to a point they might never get back to.

“Could you call that elective?” Hatiras added. “When you do the surgery, the diabetes gets better, the blood pressure gets better, the heart gets better. I take issue with what some people consider elective.”

Or take knee and hip replacements, he went on. “Is that really elective when there’s a risk of blood clots because they can’t walk or they’re risking other illnesses because they’re taking pain medications to cope with it?”

 

Call Your Doctor

Hatiras and Roose both hope the new state guidance doesn’t chase people away from seeking the care they actually need. That’s what happened last year, and hospitals and patients are still feeling the effects.

“At this point in the pandemic, our concern is that we have started to see the impacts of people in the community delaying care during prior waves of the pandemic,” Roose said. “We want to encourage members of the community to seek out important primary care, preventive care, and non-urgent care that can contribute to their health and wellness.”

In other words, let doctors and facilities decide what’s necessary — and how that care can be delivered.

“We have seen the pandemic shift many things in healthcare, including the way people seek care, which now is occurring far more through digital or virtual means than prior to the pandemic,” Roose said. “We’re seeing high demand for additional services in the home after a hospital stay, or in skilled nursing and other facilities. We are paying attention to how we can provide a service that delivers both in terms of convenience and excellence, because the pandemic has changed fundamentally the way care will be delivered for many years to come.”

The MHA, the DPH, and hospitals are united on one front: the unvaccinated far, far outnumber the vaccinated when it comes to taking up inpatient beds — and especially ICU beds — with COVID, in turn making it harder for hospitals to provide other services.

“When somebody gets to the point where they need surgery, it’s not like getting a haircut, where it can wait until next month.”

According to the DPH, 97% of COVID breakthrough cases in Massachusetts have not resulted in hospitalization or death, and unvaccinated individuals are five times more likely to contract COVID than fully vaccinated individuals and 31 times more likely to contract COVID than individuals who have a booster.

The MHA’s executive committee recently released an “urgent plea” for Massachusetts residents to do five things if they haven’t already: get vaccinated for both COVID-19 and the flu, and get boosted when eligible; always wear a mask when in public and when social distancing isn’t possible; get tested for COVID-19 if you develop symptoms or if you come into close contact with someone who has tested positive; keep up with regular medical appointments, “as we are now seeing the devastating effects of delayed care from the first waves of the pandemic”; and seek care from a doctor or urgent-care center when appropriate.

“When in doubt, you should never hesitate to visit your local emergency room,” the committee noted. “But for many medical situations, these settings can provide you with more timely and efficient care.”

It’s notable that, along with the expected advice to vaccinate and mask up, these medical professionals would warn against delaying care, even amid the DPH’s guidance to hospitals to postpone some procedures.

“Cumulatively, I think we’re dropping the health status of individuals,” Hatiras said, noting that people have put off colonoscopies, mammograms, and other procedures that are key to detecting issues early, before they develop into health crises. Holyoke Medical Center has responded with a public campaign to bring patients back, so they don’t keep delaying important visits.

“Don’t put something off. Don’t make that decision yourself,” he added. “To me, there is no safer place than a hospital. To me, a hospital is a lot safer than a restaurant, a lot safer than the mall, whatever you want to compare it to, because we have personnel aware of infection-control issues. We wear masks indoors, we hand sanitize, we know how to avoid infection.”

And don’t put off behavioral-health needs, either, Hatiras added, noting that isolation and anxiety have soared during the pandemic. “We see a lot of people deteriorating, in both their physical health and mental health, and that combination is never good.”

Roose agreed that it’s critical for individuals to seek the care they need, no matter what the state is saying, and let their doctor guide their next steps.

“There’s a lot of attention on capacity in hospitals, but we would not want anyone to delay care for important business, like mammograms, colonoscopies, lab tests, or emergency or urgent care,” he told BusinessWest. “We are here to take care of you, and we want to continue to send that message.”

 

Joseph Bednar can be reached at [email protected]

 

Community Spotlight Special Coverage

Community Spotlight

By Mark Morris

Mayor John Vieau

Mayor John Vieau says public safety and public health have been priorities of his first term.

 

Fresh off his re-election, Chicopee Mayor John Vieau said the main goal for his second term is the same when he first campaigned for the office two years ago: a focus on public safety.

“A city can have great schools, great trash pickup, and low taxes, but if you don’t feel safe, those other things aren’t so important,” Vieau said.

In the mid-1980s, Chicopee bolstered its police force by hiring a large number of officers. Nearly 40 years later, the city has seen many of those officers retire from the force, while others have left due to COVID-19 concerns to pursue other careers. For Vieau, this created multiple challenges.

“Based on civil-service exams, we hired 10 replacements for our retiring officers,” he said. “Then we ran into a quagmire because at first we couldn’t send them to the police academy because it was closed during the worst of the pandemic.”

As the academy eased its mandates, those officers completed training, and Vieau has hired an additional 15 officers with the intent of bringing the police force back to full strength.

“A city can have great schools, great trash pickup, and low taxes, but if you don’t feel safe, those other things aren’t so important.”

In addition to new officers, Chicopee is encouraging a new style of policing by introducing community policing at a substation on Center Street. With officers on walking beats, they are better able to make connections with people.

“This has been very successful because people are seeing the same officers who are building relationships and rapport with folks in the neighborhood,” the mayor said, adding that he’s looking to eventually bring a substation to Willimansett as well as other parts of the city.

The concern for public safety also extends to the Fire Department, which staffs two ambulances 24/7. Recently the fire chief suggested a pilot program to add a third ambulance for overnight coverage. The suggestion came about due to demand for more coverage during those hours as well as the closing of the private ambulance company that lent assistance when Chicopee ambulances were busy. The success of the pilot program will result in Chicopee adding a new ambulance along with the new fire pumper trucks that had been ordered.

“Just like with the police, we want to make sure our Fire Department has the tools they need to keep themselves and our city safe,” Vieau said.

Part of public safety includes fighting the spread of COVID-19. Chicopee received 15,000 rapid test kits from the state and has been distributing them to residents in low-income areas and at the senior center.

“Our message remains the same — we believe everyone should get vaccinated,” Vieau said.

 

Supporting Businesses

Keeping Chicopee businesses healthy also remains a priority. Through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, more than 70 businesses received support. Julie Copoulos, executive director of the Chicopee Chamber of Commerce, said her organization helped small-business owners receive more than a half-million dollars in grant money during the pandemic.

“For us, it meant coming back to our core mission of supporting businesses and enhancing the economic climate,” Copoulos said. “Many of the small-business grants went to minority- and women-owned businesses.”

Julie Copoulos is enthusiastic about progress on development at the former Uniroyal and Facemate sites, among others.

The city will also receive $38 million through the American Rescue Plan Act (ARPA). Vieau has formed a committee to determine how to use that money in a way that will have a long-term impact for taxpayers in Chicopee.

“For us, it meant coming back to our core mission of supporting businesses and enhancing the economic climate.”

“I have a smart group of people who are looking into the best way to use the ARPA funds,” he said. “We’ve also surveyed residents for their ideas on how to spend the money.”

Vieau wants to proceed with caution on how to use these one-time funds because it would be easy to spend it all in one place.

Chicopee at a Glance

Year Incorporated: 1848
Population: 55,560
Area: 23.9 square miles
County: Hampden
Residential Tax Rate: $16.99
Commercial Tax Rate: $37.39
Median Household Income: $35,672
Median Family Income: $44,136
Type of Government: Mayor; City Council
Largest Employers: Westover Air Reserve Base; J. Polep Distribution Services; Callaway Golf Ball Operations; Dielectrics; MicroTek
* Latest information available

“I could target one infrastructure project and use all that money and more,” he said. “For example, the wastewater treatment plant needs upgrades to keep up with current pollution standards, and that project alone will cost around $50 million.”

For bigger projects like this, Vieau is hopeful about Chicopee’s prospects for funding through the recently passed federal infrastructure deal. “I’m going to fight for as much of that infrastructure money as we can get,” he said.

In the meantime, the mayor shared with BusinessWest an important development regarding the former Uniroyal site. After more than a decade of investing millions of dollars in hazardous-waste cleanup at the site, by this spring, the city will begin looking for potential new owners of both the headquarters and an adjacent building on the site.

“We are all looking forward to getting the Uniroyal property back on the tax rolls,” Vieau said. “It’s been a long time coming, and we are super excited about it.”

Right now Michelin, which owns the Uniroyal brand, is completing $1.5 million in cleanup efforts at the site. Once that’s done, the mayor explained, the city will launch a request for proposals in search of prospective buyers of the property.

Because Chicopee represents a good number of manufacturers, Copoulos believes this gives the city an advantage in the years ahead. She noted that economists have pointed out that manufacturing industries have come back to pre-COVID levels while more customer-facing industries continue to have challenges.

“I’m enthusiastic about the development while also reminding myself to be patient because big projects like this take time.”

“As a community with so many manufacturers, this can potentially give us a leg up,” she said. “Supply-chain issues will make domestic manufacturing more of a priority, and that makes me hopeful about prospects for Chicopee.”

The spring will also mark the beginning of construction for the new headquarters of the Food Bank of Western Massachusetts. After many years in Hatfield, the Food Bank purchased 16.5 acres in the Chicopee River Industrial Park in order to expand its warehouse in a more environmentally friendly building. Selecting Chicopee was a strategic decision on a couple of fronts. The location on Carew and East Main streets gives the Food Bank easy access to major highways, and because the city is in Hampden County, where the issue of hunger and food insecurity are more severe, the organization is in a better position to address the problem.

“The Food Bank location in Chicopee will be at the hub of addressing food insecurity in Western Mass.,” Vieau said.

Dino Facente

Dino Facente says his bakery’s move from Springfield to Chicopee has been a positive one.

Anticipation is also growing for the former Facemate property in Chicopee Center. Final plans and permits are being approved for a 54,000-square-foot, multi-sport facility; a 102-unit residential building; and renovation of the former Baskin building into a 10,000-square-foot restaurant and brewery, where Loophole Brewing will locate.

Both Vieau and Copoulos praised Singing Bridge LLC, a local developer, for leading the project because it shows a commitment to the success of Chicopee. For Copoulos, completion of the project can’t arrive soon enough.

“I’m enthusiastic about the development while also reminding myself to be patient because big projects like this take time,” she said.

Vieau noted in particular the 102 units of housing that will be added to Chicopee Center.

“Many people want to stay in Chicopee but are looking for empty-nest housing,” he said. “Realtors have told me if more condominiums were on the market, they could immediately sell them.”

 

Stops and Starts

The city had a setback recently when the Silverbrook Group said it may not be able to develop 600 apartments in the former Cabotville Mill in the center of town, citing rising construction costs as the main culprit. Vieau remains optimistic that both the Cabotville and Lyman mills will eventually be developed for housing and other uses.

While the next step for the mills is uncertain, that hasn’t stopped Vieau from moving forward with what he called a renaissance of Chicopee’s downtown. The city received a grant to convert the old library building, adjacent to City Hall, into an incubator space for budding entrepreneurs. The first steps involve bringing the building up to compliance with current ADA regulations. Vieau would like to eventually see the cultural council or the chamber take office space there, too.

“I liked the location because it’s not far from the plaza, and I could keep the customers who enjoyed coming in.”

“Entrepreneurs have to start somewhere, so why not start at our old library?” he wondered.

Next door to the old library, the former Rivoli Theatre has just gone up for sale. The mayor called this another space with great potential for the city.

In addition to new entrepreneurs, Chicopee still manages to attract established businesses to locate there. After decades at the Springfield Plaza, Dino Facente had been looking to move the Koffee Kup Bakery. In his words, he “stumbled on” Mickey’s Bike Shop, which had recently closed. The East Street location turned out to be the right spot to move the bakery.

“I liked the location because it’s not far from the plaza, and I could keep the customers who enjoyed coming in,” Facente said. He also credited Chicopee officials at all levels for making the move easy and successful.

“I’ve picked up a lot of business since I’ve been here,” he said. “I’ll be staying here until I retire.”

Economic Outlook

Sector Is on the Rebound, but Hospitality Still Faces Staffing Issues

 

the Big E came roaring back in 2021

After skipping 2020 altogether, the Big E came roaring back in 2021, even posting its best-ever attendance day in fair history.

John Doleva said 2020 was supposed to be the “year of all years” at the Basketball Hall of Fame, when it would unveil a $25 million renovation of the museum and welcome record crowds to a series of events and new attractions.

It was the year of all years, all right. Just for … another reason, namely a pandemic that shuttered most tourist attractions for months.

But the Hall did get to that ribbon cutting this past May, said Doleva, the institution’s president and CEO. And that wasn’t all.

“We had a terrific summer,” he told BusinessWest. “We were up 36% over 2019 — and that’s comparing it to a quote-unquote ‘normal’ year; we were up 300% over 2020.”

The Hall was very aggressive in promotion and advertising across a variety of platforms in 2021, he added, highlighting additions like a 14-by-40-foot LED screen on center court that could host remote visits with Hall of Famers, and recently wrapping up a series of eight college basketball tournaments in major cities across the country.

“I’d say we came out of 2021 as positive as we possibly could,” Doleva said, adding that the plan is to continue to aggressively market and elevate the brand in 2022, as well as looking to open new galleries every year, taking a lesson from Six Flags, which tends to unveil a major new ride each spring. “We’ve adopted that thinking. We want to give customers reasons to come back and see something new and exciting.”

Mary Kay Wydra has also been impressed with the tourism sector’s resilience in 2021.

“When the restrictions were lifted in late spring, we saw a boost in the attractions, and hotel occupancy grew,” said Wydra, president of the Greater Springfield Convention and Visitors Bureau. “Looking ahead, I do feel like we’re positioned to continue building on this momentum.”

Mary Kay Wydra

Mary Kay Wydra

“When the restrictions were lifted in late spring, we saw a boost in the attractions, and hotel occupancy grew. Looking ahead, I do feel like we’re positioned to continue building on this momentum.”

Last year’s boost in tourism was largely generated by leisure travel — and a need among people to go to something, she noted.

“When we were hunkered down at home, not doing anything, we all had a desire to reconnect with family and friends. The industry term is ‘human-oriented travel’ — the collective urge of people to reconnect. And we saw that.”

What she also saw was a region uniquely situated to meet that need in enriching ways. “We have a lot of things to do in our area. And when people come to visit, not everyone stays with family; they’re staying in hotels and visiting our attractions. So we had a very robust summer.”

So robust, in fact, that hotel occupancy rates in the region this summer exceeded pre-pandemic 2019 levels in three different months.

“It would be great to continue the momentum in 2022,” Wydra went on. “We always know the first three or four months is soft — it’s our shoulder season — but we should see good travel again this summer, again dominated by leisure travel. Conventions and meetings have been far more impacted by the pandemic, and 2022 will still be a little light. But the forecast for 2023 is far better.”

That’s because many organizations schedule their annual events a few years out, and events that were canceled in 2020 already had other sites scheduled for 2021 and 2022, but not 2023, she explained — and Western Mass. is aiming to get some of that business back — that is, “if they’re still doing in-person meetings,” Wydra said, and that is, indeed, a lingering question on the convention circuit.

It didn’t seem like many people had a problem crowding into the Big E a few months ago. A total of 1,498,774 people visited the 2021 event, after it was canceled outright in 2020. According to Carnival Warehouse’s annual Top 50 Fairs list, the 2021 Big E was the third-largest fair in North America, even surpassing the Minnesota State Fair — a huge achievement, Eastern States Exposition President and CEO Gene Cassidy said — for the first time.

On its way to that achievement, the Big E set four daily attendance records over the course of the 17-day event, including an all-time single-day attendance of 177,238 on the final Saturday.

“I think there was pent-up demand,” Wydra said of those numbers. “You miss something for a year, you definitely want to get back there the next.”

Jonathan Butler, president and CEO of 1Berkshire, said hard numbers won’t be known for a while regarding visitorship in Berkshire County in 2021.

“But our feeling, especially post-Memorial Day weekend, was that the Berkshires was really bustling during the summer,” he told BusinessWest. “And we saw different types of visitors to the Berkshires — a lot more younger couples, younger travelers trying to get out of the urban setting and finding the Berkshires to be a great option for them, with open space, a lot of recreational opportunties, and room to breathe. We saw bits and pieces of that in the summer of 2020, but saw it exponentially increase in 2021.”

Two factors slowed the momentum somewhat, and they’re both national in scope, not unique to Western Mass., Butler said. One was the Delta variant of COVID-19 (and, on its heels, Omicron), and the other is a lingering workforce shortage, which has kept some attractions, restaurants, and retail destinations from being open every day, and forced some hotels to operate at less-than-peak room capacity.

“We’ve seen a little bit of growth in terms of job applicants and some employers being able to get some workforce back,” Butler said, “but it’s still a bigger gap than we want for the economy to get fully back on its feet.”

“We saw different types of visitors to the Berkshires — a lot more younger couples, younger travelers trying to get out of the urban setting and finding the Berkshires to be a great option for them, with open space, a lot of recreational opportunties, and room to breathe.”

One factor that especially impacts hotels has been a decline in international workers coming to the region on work visas, due to both pandemic fears and shifting federal rules, he explained. “These are highly trained, motivated members of our local properties’ teams, and the loss of that demographic in the workforce has been another obstacle that has disproportionately affected hospitality.”

On the plus side, “even starting in 2020, we’ve seen a boom in outdoor recreation; it’s been a leading reason to visit the region,” Butler noted. “We saw continued increased activity at museums this year, again, building off 2020. Many museums and historical sites feature outdoor space, which is a nice option for people. And we saw some return to live performing arts this year. We’re very sensitive to the impact the pandemic has had on performing arts in the Berkshires, so it was good to see a return to live performances again at places like Tanglewood and Jacob’s Pillow.

“The big takeaway from 2021 was that people want to be here, and it’s a broader group that wants to be here, not just couples over 50,” he went on. “We’re seeing an influx of young adults, young families, who want to take part in a large variety of things — outdoor recreation, the food economy, health and wellness opportunities. We’re exposing whole new audiences to the Berkshires, and that will benefit us in the long term.”

Wydra feels the same about Western Mass. as a whole, and said the industry has learned to roll with the shifting demands of the pandemic because society demands it.

“Just like people in general, we have to adapt to the challenges COVID puts in front of us, things like masking, sanitary conditions, safety protocols. It’s super important to visitors, and something that will not go away for a while, if at all,” she said. “It’s becoming our new normal, and we’re all trying to figure it out.”

While noting, once again, how important it is that conventions and group business return at some point, Wydra also admitted the region has plenty going for it.

“The beauty of Western Mass. is that we have this amazing collection of great attractions and incredible natural resources. If people don’t want to go to Six Flags, they can go ziplining or rafting. There are so many things to do here, and that’s why we’re positioned well as a destination.”

Doleva has been busy promoting the re-envisioned Hall as an ideal site for meetings, fundraising dinners, product launches, and more, and he takes a similar interconnected view of the tourism industry in general. In fact, he says it’s necessary if the sector truly wants to shake off the pandemic and move ahead.

“We certainly take our obligation as part of the major attractions in the Valley very seriously,” he said. “We can and will work together as we go forward, and I think we’ll be in a very good position. None of us thinks of this region as a single-day trip. There’s multiple things to do, and we’ve recommitted to that idea throughout this whole COVID experience.”

 

— Joseph Bednar

 

Economic Outlook

The Prognosis Is for Another Year of Stern Challenges in 2022

 

Dr. Robert Roose says he’s deeply optimistic that 2022 will be the year when, as he put it, “COVID no longer rules most aspects of our lives.”

Elaborating, Roose chief medical officer for Mercy Medical Center, said that soon — how soon, he doesn’t know — COVID will reach a point where it is a more endemic infection that has much lower risk for larger numbers of people in the community. He bases that belief on a number of factors, including vaccines, rapid testing, and, soon, an oral, pill-based therapy that can reduce the risk of hospitalization amongst those that are most vulnerable to severe illness.

“The combination of these things has me optimistic that, for the summer, six months from now, and perhaps sooner, we will have lower rates of infection, higher proportions of our population immune to COVID — or at least the most severe effects of COVID — through vaccination or natural infection, and we will have more therapies that are available for those that would be vulnerable,” he said. “And I’m optimistic that will happen this year.”

Lynnette Watkins

Lynnette Watkins

“I’m very much an optimist; I’m a glass-half-full kind of person. I’m optimistic about the year ahead, despite the many challenges we face now and into the future. But 2022 is going to be challenging, especially the first few quarters, because of COVID and the ramifications of both the current surge and previous surges.”

Roose is not alone in that assessment — others we spoke with expressed similar optimism — but for now, all those in healthcare must cope with the present, when COVID still does rule most aspects of our lives, and when there are myriad other challenges stemming from the pandemic.

These include everything from intense workforce shortages that are being felt in this sector perhaps more than any other; high levels of fatigue and burnout among those working in most all healthcare settings, especially hospitals; growing mental-health issues that are impacting people in all age groups; and mounting non-COVID-related health issues stemming from individuals putting off needed care during the pandemic, or simply not being able to get it (see related story on page 41).

The sum of all these challenges and others prompted Dr. Mark Keroack, president and CEO of Baystate Health, to use the word ‘crisis’ early and quite often as he addressed the state of his healthcare system at an hour-long Zoom press conference a few weeks ago. Actually, he used the plural of that word, noting that his system was and is facing four crises: staffing, capacity management, a surging need for behavioral-health services, and, of course, COVID and the skyrocketing increases in cases due to Omicron.

While addressing these issues, Keroack echoed Roose when he said he is optimistic that COVID will become more endemic and, therefore, less controlling in the months and years ahead. But those other issues, and especially the workforce crisis, are expected to linger well into 2022 and probably well beyond.

Lynnette Watkins, who recently took the helm at Cooley Dickinson Hospital in Northampton, agreed, although she, too, was optimistic about 2022 and beyond.

“I’m very much an optimist; I’m a glass-half-full kind of person,” she said. “I’m optimistic about the year ahead, despite the many challenges we face now and into the future. But 2022 is going to be challenging, especially the first few quarters, because of COVID and the ramifications of both the current surge and previous surges.”

Dr. Mark Keroack

“About one in five healthcare workers has left the field since the start of the pandemic, and clearly that has shown up in our institution as well.”

The new year will certainly get off to an ultra-challenging start, she went on, noting that Omicron will test the healthcare system in every way imaginable, from capacity to workforce.

“We’ll get through this, but it’s going to be a challenging, challenging time for the next three to four months,” she told BusinessWest. “We tend to be about three weeks behind our neighboring states, meaning Connecticut, New Hampshire, and New York, in particular, when it comes to this surge in the disease. So January is going to a particularly tough time for this region, but what we’re seeing in the research is that, as quickly as this virus surges, it declines.

“With that, we need to make sure we have the capacity and capability of taking care of those patients who are COVID long-haulers, as well as those who have deferred and delayed care,” she went on. “And that is going to continue to be a challenge.”

Looking forward, those we spoke with said that perhaps the biggest challenge looming over the industry is a workforce crisis that was in evidence before the pandemic, especially among nurses, but has been exacerbated by COVID.

“We’re seeing those gaps just widen,” Roose noted. “The chasm between what we need to close is just wider.”

For the immediate future, hospitals and other providers will be impacted not only by people leaving their jobs, or the industry as a whole, due to retirement, burnout, and other factors, but also workers being infected by the virus and being forced to the sidelines, as well as the huge toll the shortages take on those in the trenches.

“We’ve really put a lot on our people — we’ve asked them to do a lot, like coming in for extra shifts, filling in, and stretching themselves,” Keroack said. “If we were fully staffed with people who were feeling refreshed, we’d feel a lot more confident about what we’re facing in the next few weeks.”

Meanwhile, staffing up during this crisis is a difficult and very expensive proposition, with all hospitals forced to hire what are known as ‘contract nurses,’ often at rates of $5,000 per week or more, Roose noted.

As for workers leaving their jobs, the numbers tell the story; Keroack told the assembled press that Baystate had 1,800 vacancies at that point in time in a total workforce of 13,000, roughly 14% of its workforce. In normal times, the number of vacancies would be closer to 500.

Dr. Robert Roose

Dr. Robert Roose

“Long-term, we could build some strength out of this. But short-term, it’s going to be very challenging.”

“About one in five healthcare workers has left the field since the start of the pandemic, and clearly that has shown up in our institution as well,” he remarked. “It’s been especially hard for bedside caregivers; many nurses have taken early retirement, and it has also affected respiratory therapy and pharmacy, and it’s been hardest for our entry-level employees — medical assistants, various technical positions, nurses’ aides, environmental workers, food-service workers.”

Roose said the numbers are similar at Mercy, with vacancy rates of 10% to 15%, with ‘functional’ vacancy rates, those that take into account open positions but also those employees on leave, being much higher, in some departments as much as 30% or more.

At Cooley Dickinson, Watkins noted, the number fluctuates anywhere between 9% and 12%, with the majority in nursing and nursing support.

In response to these developments, hospitals have made adjustments, said those we spoke with, including higher wages for many positions, expanded benefits eligibility, bonuses, ramped-up recruiting efforts, job fairs, and other steps, all aimed at bringing improvement when it comes to both hiring and retention.

And in some respects, they’re working, said Keroack, noting that these efforts are bringing in between 100 and 150 new workers each week, with the ratio of people coming in to those leaving being roughly 2 to 1.

“So we’re gaining on the problem, but it still quite significant,” he said, adding that, to that point in time, the system had spent roughly $40 million on bonuses and shift differentials, and another $40 million on contract-labor expenses, for calendar year 2021.

Looking ahead, those we spoke with said that, eventually, the laws of supply and demand will being improvement to the staffing crisis, but relief is not likely to come any time soon.

Keroack said part of the problem, especially when it comes to nurses, is simply getting enough people into and then through the pipeline.

“There’s a tremendous shortage of nursing faculty members — we had a number of senior seniors take early retirement — and so the pipeline simply wasn’t fat enough to completely replenish the pool in a quick amount of time,” he said. “We have waiting lists of people wanting to go to nursing school, but they’re limited by the number of clinical placements and the number of faculty.”

Roose agreed. “I think that at some point, a few years from now, things will start to settle out, perhaps sooner if there can be some major interventions at the federal level from a legislative perspective, as well as reconnecting with some of the meaning behind why people get into healthcare in the first place,” he noted. “This can spur people to enter the field as a result of wanting to be part of something so transformative.

“Long-term, we could build some strength out of this,” he went on. “But short-term, it’s going to be very challenging.”

The same can be said the mounting mental-health crisis impacting the region and the entire country, said Watkins, expressing optimism that American Rescue Plan Act funds can and will be put to use to address this emerging issue.

“A lot of what’s coming through this act will definitely help on all fronts and all healthcare providers,” she explained, “but especially our mental-health professionals and building that pipeline to increase access to care — because we’ve all suffered, and if we’re not looking into mental-health support services, we should.”

And while COVID has certainly given all those in healthcare a number of headaches and challenges, it has also given this sector the opportunity, born of necessity, to innovate and find and new and often better ways of doing things and caring for patients, said Watkins, adding that perhaps the best example of this is the rise of telehealth, a trend that will certainly continue in 2022 and beyond.

“While a lot of people might have thought about telehealth before the first wave of the pandemic, now it’s here, and it’s here to stay,” she said, with conviction in her voice. “Whether it’s teleradiology, teleneurology, or other ways of engaging telehealth … this has emerged as one of the key delivery options of the future; there’s more access, without the inconvenience of travel and waiting. The emergence of telehealth has been a real game changer.”

Summing things up, Watkins maintained her glass-half-full outlook, but stressed repeatedly that 2022 will pose the same challenges as the past two years, and they will likely increase in intensity before there is solid improvement.

“We have a very, very depleted workforce,” she said while speaking for all her colleagues in the industry, “and a very, very sick population.”

 

— George O’Brien

Economic Outlook

Region’s Colleges, Universities Face More Stern Tests in 2022

 

Looking ahead to 2022, Sandra Doran projects that this will be what she called “the year of the woman.”

Elaborating, she said many women have put their lives, careers, and educational goals on hold the past few years. And she projects that many will be making up for lost time in the months to come as the region and its large and important higher-education sector look to return to something that has been quite elusive since March 2020: normalcy.

“COVID has had a disproportionate impact on women, both in the workforce and in higher education,” said Doran, president of Bay Path University in Longmeadow, a women’s college, at least at the undergraduate level. “Many people lost their jobs, and many students weren’t able to continue, especially our adult students, those who work and live and go to school, and our graduate students — many of them had to delay their own aspirations. And I see many people saying, ‘I’m not going to put that aside any longer.’”

Sandra Doran

Sandra Doran

“Many people lost their jobs, and many students weren’t able to continue, especially our adult students, those who work and live and go to school, and our graduate students — many of them had to delay their own aspirations. And I see many people saying, ‘I’m not going to put that aside any longer.’”

The area’s colleges certainly need this to be the year of the woman — and a better year all around. Many had been struggling with enrollment before the pandemic, due to smaller high-school graduating classes, but other factors as well. And the pandemic only exacerbated the problem, with enrollment down more than 3% nationally in the fall of 2021.

The region’s community colleges have been the hardest-hit, with double-digit drops in enrollment at all of them over the past two years, but all schools have been impacted by COVID.

“Like every state university in Massachusetts, we’re having enrollment challenges,” said Linda Thompson, who took the helm at Westfield State University last summer, noting that many are still wary about attending college in the midst of a pandemic.

Those we spoke with said ‘normal’ was something they were anticipating would return last fall. Indeed, as COVID cases plummeted over the summer and the economy reopened across the board, there were high expectations for that fall semester, said Harry Dumay, president of Elms College in Chicopee. But the Delta variant showed how quickly the picture, and expectations, can change.

And as the new year dawns, COVID and its Omicron variant loom large over this sector, with some uncertainty about whether schools can open their campuses for the spring semester (several closed their doors as Omicron cases spiked in the middle of December) and under what circumstances they can reopen.

“Fall of 2021 was actually a very good enrollment period for us.”

“We’ll be watching over the break to see how things develop, and we will have contingency plans in place if we need to do anything different,” said Dumay, adding that returning students must be vaccinated and receive their boosters as soon as they are eligible. “We’ll be as cautious and prudent as we were in the fall of 2021, and even more so, given what we’ve seen from Omicron.”

There are other challenges as well, especially a workforce crisis that hasn’t spared any sector, especially higher education.

“We have jobs that are going unfilled; we have jobs where, in the past, we’d have 100 applicants — we’re just not seeing that anymore,” said Thompson, noting this trend involves positions at every level and shows few if any signs of abating any time soon.

But amid the questions, concern, and uncertainty, there is also optimism, expressed by Dumay and others, that 2022, and especially the fall semester, will bring improvement on enrollment numbers and a return to something approaching normal.

Harry Dumay says he’s confident about the way enrollment is trending at the Elms heading into 2022.

Harry Dumay says he’s confident about the way enrollment is trending at the Elms heading into 2022.

Or continued improvement, as the case may be.

“Fall of 2021 was actually a very good enrollment period for us,” said Dumay, adding that, after a slight decline in the fall of 2020, the first semester after COVID made its arrival, the school — bucking those national trends — saw record applications among traditional, first-time freshmen, close to record acceptances, and one of the highest enrollment numbers for first-time freshmen in more than a decade.

Meanwhile, the numbers for transfer students and graduate students were also solid, with the latter helped by the opening of a graduate admissions office, he went on, adding that the only segment that was down was continuing education, the students who transfer from community colleges, a statistic in keeping with the struggles at those schools.

“As we look to the fall of 2022, everything is trending as it was in the fall of 2021,” he went on. “In fact, we’re ahead, year over year, in terms of applications, and all three segments that were good last year continue to look very solid for 2022.”

Doran shared that optimism. “I feel very confident about next fall,” she said. “Many students had an online experience over the past few years in high school, and now, they’re looking for a more personalized, in-person fall experience, and that’s what we’re really good at.

“I really see this as a very strong year for women in education and women in the workforce,” she went on. “And I feel that way for several reasons, starting with the fact that I hear women say, ‘we can no longer put on our lives on hold — we have to move forward aggressively, and part of our life plan is to make sure we have the right education.’

“But we also hear from employers that they’re very eager to fill their talent pipeline,” she went on. “They know our students, that they’re well-qualified and exceptional employees, and we’re working very closely with employers to make sure our curriculum provides our students with the strengths, capabilities, skillsets, and thinking ability to succeed; I see it on both sides of the equation.”

Linda Thompson

Linda Thompson

“We’re looking at more things we can do with community colleges. We need to streamline pathways from high school to community college to four-year institutions. These are the things that are going to much more prevalent moving forward.”

When asked if the phrase ‘pent-up demand,’ which is being heard in many contexts as the economy continues to grow, also pertains to higher education, those we spoke with offered a qualified ‘yes,’ noting that there is demand for education that is career-focused.

“I think we’re going to see increased enrollment in the online space, and I think it’s because women know that, to advance their careers and to realize their career aspirations, many of them need a credential, a bachelor’s degree, a master’s degree — if you’re going to teach in Massachusetts, eventually you’ll need a master’s degree,” Doran said. “There’s a lot of momentum around educational attainment, particularly for our students. That’s because we’re really focused on student services, internship, career development, and making sure our curriculum aligns with workforce needs.”

Thompson agreed, noting that, as the number of high-school graduates continues to decline, colleges and universities need to increase their focus on those who may have tried college and stopped because life got in the way.

“Now, they’re probably looking for opportunities for growth and moving up in their jobs,” she noted. “So we need to do more to reach adult populations; faculty are starting to look at the way they offer courses, and probably will be offering more things in a blended format.

“Also, we’re looking at more things we can do with community colleges,” she went on. “We need to streamline pathways from high school to community college to four-year institutions. These are the things that are going to much more prevalent moving forward.”

Beyond enrollment and a long list or protocols to be followed and updated as necessary, COVID has brought other challenges as well, and these will certainly continue in 2022, said those we spoke with. Dumay told BusinessWest that managing through the pandemic has been difficult and exhausting on many levels.

“Across higher education, and across all industries, for that matter, people are tired,” he said. “If you ask any college president, they would say they and their teams are … fill in your favorite word — they’re on edge, they’re tired, they’re demoralized. And we’re paying attention to all that.”

Elaborating, he said ‘all that’ means paying more attention to the needs of students, obviously, but also faculty and staff, many of whom are coping with pandemic-related issues off the job as well as on it, and also focusing on the mental health of students.

“Students have different ways of coping with the uncertainty of the time,” he said. “And we’re seeing, across all campuses, a lot more students with mental-health issues, and COVID is exacerbating that.

“All of these things have created a whole lot of challenges, and there’s been very little let-up,” Dumay said in conclusion, adding that this trend, in addition to all the others, will almost certainly continue into the new year.”

Thompson agreed. “I think we’re going to be living with this virus for a long time,” she said. “I see it continuing to mutate; I see us having to be vigilant with hand washing, wearing masks, paying attention to our health and well-being, and doing whatever we need to do.”

 

— George O’Brien

Economic Outlook

Many Are Busy, But Challenges Linger as the New Year Dawns

 

Bart Raser says customers, contractors, and homeowners have all felt frustration

Bart Raser says customers, contractors, and homeowners have all felt frustration when their favorite brands aren’t available.

Bart Raser started by stating the obvious: 2021, like 2020, was “a great year to be in the hardware business.”

Indeed, many of those who found themselves working at home, or just spending more time at home because of COVID, found themselves wanting to work on their homes as well, and that certainly brought more customers — contractors and do-it-your-selfers alike — to the doors of the eight Carr Hardware locations, six in Western Mass. and two in Northern Conn., with the flagship store in Pittsfield.

But while business has certainly been good, there have been myriad challenges as well, from workforce shortages — which Raser, the company’s president, has largely been able to avoid, and he’s one of the few who can really say that — to inflation, production, and supply-chain issues, caused in large part by that soaring demand and a workforce crisis that no one in his sector has been able to avoid.

And that’s why large orders of grass seed, bird food, and other spring items will be arriving at those stores in a few days or a few weeks, rather than in mid-March, as is customary, because Raser’s team ordered well in advance to make sure the shelves would be stocked. And that’s also why he’s predicting it will be very difficult to buy a new lawnmower come April, and those forced to do so will pay a steep price for that item.

“Lawnmowers for spring look tricky — really, really tricky,” he told BusinessWest. “Some of the big manufacturers got out, and … there will be fewer choices and significantly higher prices.”

Raser’s story has its own specific nuances, but there are common threads for most all small-business owners in the region. For many, business has been good, although in most cases still not as good as before the pandemic. But there have been — and will continue to be — headwinds, like inflation, shortages of products that consumers want, lingering workforce issues, and the impact of all of the above on the bottom line.

Kris Houghton, a partner with the Holyoke-based accounting firm Meyers Brothers Kalicka, said 2021 was a time when her small-business clients were looking to put COVID behind them. That didn’t happen, obviously, and as they continued to battle the pandemic and many new challenges emerged or escalated, especially the workforce crisis and the rising cost of everything from labor to health insurance.

“There’s definitely an employee shortage, which is causing employers to have to pay more than they would otherwise have paid in the past,” she explained. “And, of course, paying more leads to two things: they either increase prices to their customers, or there is less profit for them in the end. It’s a compounding problem, and the biggest issue is employees.”

But there are others, including supply chain, she said, adding that businesses in many sectors could have done better in 2021, if they only had product to sell or produce. That’s true of auto dealers, obviously, but also hardware chains, restaurants, and manufacturers.

“Supply chain is also a big problem because, if businesses can’t get the product, they can’t sell it,” Houghton noted. “And if they want the product bad enough, they pay increased shipping costs to try to make product available; all this is leading to diminished bottom lines.”

And these dynamics become even more critical in the months ahead, she went on, because most federal support programs, from PPP to the employee-retention credit, have expired or soon will.

“Those were lifelines to try to restore a little bit to their bottom lines,” she said. “So there is concern about the future. In New England, we’re resilient, and some businesses were fortunate enough to have some reserves that can help them carry on. I don’t know about the other businesses. Are they going to be able to borrow? Are they going to run up costly debt? Are business owners going to be relying on credit cards, which come with 18% interest? These are some of the questions that will be answered in 2022.”

“Supply chain is also a big problem because, if businesses can’t get the product, they can’t sell it. And if they want the product bad enough, they pay increased shipping costs to try to make product available; all this is leading to diminished bottom lines.”

As noted, 2021 was a solid year for many small businesses, especially those in manufacturing and related services. Jeanne Bell, controller and co-owner of Westside Finishing Co. in Holyoke, spoke for many when she said her company struggled to keep up with demand from customers who saw a surge in orders themselves.

“We ended up having a really good year,” she said. “It started off rocky, of course — the first two quarters, we were eligible for the employee-retention credit, but the second half of the year has been really, really busy, and it looks like it’s going to continue into next year.”

She said Westside is a job shop that power-coats parts and ships them back out again. Clients, and there are many, include OEMs like East Longmeadow-based Excel Dryer.

“We work for a variety of industries, and all of them are busy right now,” she told BusinessWest. “We’re actually turning down work right now because we can’t do it all; we would have to start a second shift to have more capacity, and we probably wouldn’t mind doing that if we thought we could get the people, but that’s our biggest challenge — workforce.”

Elaborating, she said the company’s labor costs rose in 2021, and one of the big reasons why was the need to hire additional staff to fill in for those out with COVID. And those additional costs kept this past year from being as profitable as others in the past.

Looking back, and ahead, she said overall sales in 2021 were not quite at pre-COVID levels. But she believes the company can get there in 2022, if current trends involving customers continue, if the economy continues to grow, and if some of those issues impacting clients themselves, including production and supply chain, work themselves out.

That’s a good number of ‘ifs,’ but overall, she said there is ample reason to be optimistic about the year ahead.

“We’re actually turning down work right now because we can’t do it all; we would have to start a second shift to have more capacity, and we probably wouldn’t mind doing that if we thought we could get the people, but that’s our biggest challenge — workforce.”

Raser concurred, but noted that most of the issues that came to the surface in 2021, especially when it comes to production and supply-chain woes — due to everything from soaring demand to workforce shortages to that large number of container ships waiting in a queue to be unloaded — are expected to linger well into 2022. He said roughly 3,000 of the 38,000 products his company sells have been impacted by both production and supply-chain issues, with that list including everything from paint and batteries to plumbing supplies and those aforementioned lawnmowers and other types of power equipment.

Paint manufacturers have been especially hard hit, he noted, adding that resin plants in Texas were set back by a succession of natural disasters, including the snow and freezing temperatures last winter and, later, hurricanes, as well as workforce challenges.

“All the big manufacturers of paint — Sherwin Williams, PPG, and Benjamin Moore — are all really struggling,” he noted. “And our painting contractors are very frustrated, as are their customers and homeowners as well. We’re been around a long time and have a lot of brands, so we’re able to pull a lot of levers to keep items in stock, but people have to flexible — they may have to consider moving to a different brand or a different product to get their project done.”

That part about being flexible goes for small businesses as well. This past year was solid for many of them, but business wasn’t the ‘normal’ that people had been hoping for, and expecting, around this time last year.

As we turn the calendars again, there are similar hopes and large doses of optimism, but the reality is that normal, as we knew it 22 months ago, is still an elusive target.

 

— George O’Brien

Economic Outlook

There Were Glimpses of Progress in 2021, and More Are Expected

When asked to project what lies ahead, Rick Sullivan said he believes the region got a taste of what he expects 2022 will be like last summer and early fall — before Delta and Omicron entered the lexicon.

Flashing back, he said the tourism sector was rebounding on many levels, with the Big E on its way to a very solid year, many other attractions across the region open again, and most all restaurants and other types of venues taking full advantage of large amounts of pent-up demand.

Meanwhile, the housing market was (and still is) booming, in part because there was considerable interest in moving to this region among those in Boston, New York, and other markets due to the growing popularity, and availability, of remote work. And the Western Massachusetts Economic Development Council, which Sullivan serves as president and CEO, was seeing an uptick in inquiries and site searches involving the region, with much of the interest coming from transportation and distribution companies, but also some manufacturers as well.

Rick Sullivan

Rick Sullivan

“From a retail and from a travel and tourism point of view, the future looks bright, and we had that taste of it.”

“We didn’t quite get to where we thought we’d be when we looked into our crystal balls at the start of 2021, but I thought we caught a glimpse of where we will be in the summer and early fall,” he said. “From a retail and from a travel and tourism point of view, the future looks bright, and we had that taste of it.”

That ‘taste,’ as Sullivan called it, could be a preview of 2022, and there is considerable optimism that it will be. But there are many question marks regarding what’s on the horizon, and most all of them are COVID-related in some way, shape, or form.

That includes a workforce crisis that has impacted every sector of the economy and spawned the term ‘Great Resignation,’ as well as supply-chain issues, enormous stress and strain on healthcare providers, and a host of challenges for small businesses, including, by and large, the end to COVID-generated federal relief measures such as PPP and the employee-retention credit.

As for COVID, itself, its unpredictability — and deep impact on the economy and specific business sectors — were on full display in December, said Tom Senecal, president of Holyoke-based PeoplesBank, citing postponed business conferences, canceled holiday parties (including one scheduled by his company), and the ripple effect all this had on businesses that were projecting a far better end to 2021, as just one example.

“COVID is going to be the impactful event of the beginning of 2022 — it might alter the way we continue to do business,” he said. “It comes down to mandates and whether businesses can stay open. Some colleges are closing; think about how it might affect the Amherst and Northampton market if colleges are closing and maybe not reopening depending upon how COVID goes.”

But despite great uncertainty about COVID and other issues, such as inflation and the fact that is no longer transitory in the eyes of the Fed, there is optimism that soon — how soon no one knows — the region may be see more of what it caught a glimpse of in 2021.

Vince Jackson, executive director of the Greater Northampton Chamber of Commerce, said many businesses returned to 2019 levels of revenue last year, and many others that didn’t at least came close, with expections that they will in the year ahead. But in many ways, the situation is similar to what the region was experiencing a year ago. As 2021 dawned, there was a general feeling that the worst was over and that ‘normal’ was maybe a quarter or two away. The reality was much different, of course.

“One of the things we learned from 2021 is that things are ever-changing,” he explained. “The outlook could be one way today, but end up being very different. We didn’t know what to expect at the end of 2020 as we headed into 2021, and we were just hoping for the best. And … here we are again, ending the year with a lot of uncertainty, just as much uncertainty going into 2022.”

As the new year starts, Jackson noted, many business owners, especially those in the retail and hospitality sectors that dominate Northampton’s economy, are looking for more consistent statewide direction regarding masking, vaccinations, and other COVID-related matters.

Vince Jackson

Vince JacksonVince Jackson

“One of the things we learned from 2021 is that things are ever-changing. The outlook could be one way today, but end up being very different. We didn’t know what to expect at the end of 2020 as we headed into 2021, and we were just hoping for the best. And … here we are again, ending the year with a lot of uncertainty, just as much uncertainty going into 2022.”

“Most business owners are looking for guidance on masking so that they don’t have to end up being the mask police,” he said, adding that many have questions about whether masks should be mandated or simply advised, because business can be lost depending on the answer.

Like Sullivan and others we spoke with, Jackson said 2021, or at least a short slice of it during the summer, provided a glimpse of what everyone is hoping for in 2022.

“As the year went on, things got better,” he recalled. “Summer came, the economy reopened, and people were ready to get outside and return to a sense of normalcy. We saw that in almost every sector of business, and the response was beyond expectations because of the community’s response, the public’s response, to returning to what was normal for them.

“From a restaurant standpoint, there was outdoor dining for those not quite ready to get out as much, and there was still takeout. But then, there was a whole statewide initiative to push indoor dining because we had the vaccines and things were safe,” he went on. “As I look back, I think we need to learn from history because we’re kind of in the same cycle in most people’s minds.”

Looking back at 2021, Jackson said the dominant limiting factor for most businesses was workforce. It kept many restaurants closed an additional day, or even two, each week, and it kept many types of businesses from realizing their full potential as the economy roared back to life in last spring and summer as COVID restrictions were lifted.

Thus, perhaps the biggest question hanging over 2022, beyond COVID, of course, is whether there will be any improvement on the labor front.

Tom Senecal says COVID is going to be the impactful

Tom Senecal says COVID is going to be the impactful event of early 2022, and might continue to alter the way business is done.

It’s too early to tell, but at present, there are few signs of real progress, said Senecal, who related a recent experience at the bank that speaks volumes about how deep and widespread the problem is.

“We had an open, entry-level position a few months ago that 16 people applied for; 16 people set up an interview, and 16 people didn’t show up the interview,” he recalled. “No phone call, no nothing.”

As alarming as that is, what’s perhaps more disconcerting is a lack of solid answers for what is behind this and similar episodes being recorded at businesses across the region.

“I don’t know what that says,” Senecal said, with a note of exasperation in his voice. “This was a few months ago, after the unemployment benefits ran out. I don’t understand that phenomenon and why it’s happening now.”

Sullivan concurred, and said that what the past few months have clearly shown is that the problem is much deeper than unemployment benefits and also rests with issues such as childcare, elder care, and the retirement of many in the Baby Boom generation.

“Every business has the help-wanted sign out, and you’ve seen things like sign-on bonuses and higher wages, which I think is a healthy thing for the economy,” he told BusinessWest. “Our employers have had to get a little more creative with incentives to keep the employees they have, and they’ve had to do things to bring new workers in. It’s not a regional problem, but a national one, and it’s one we’re going to have to come to grips with in 2022.”

“Our employers have had to get a little more creative with incentives to keep the employees they have, and they’ve had to do things to bring new workers in. It’s not a regional problem, but a national one, and it’s one we’re going to have to come to grips with in 2022.”

Meanwhile, there are other challenges the region must contend with in the weeks, months, and quarters to come.

“Supply chain and inflation are the two biggest economic dampers, both nationally and regionally,” Senecal said. “Core inflation is up 6%, gas is up 33%, cars are up 12% … when you talk inflation, it’s not the 6%, it’s the things outside the core inflation index that are really driving up prices. And the Fed has taken the words ‘temporary’ or ‘transitory’ out of their projections, meaning the Fed believes it’s real inflation.”

But while there are challenges, there are opportunities as well, said those we spoke with, noting that 2021 brought some positive signs when it comes to interest among both individuals and businesses alike to come to Western Mass. to take advantage of its quality of life and lower overall cost of living.

As for individuals, many have decided they can live in the 413 and work essentially wherever they want, said Sullivan, adding that this dynamic certainly impacted the local housing market, driving prices higher as inventory levels fell, following the laws of supply and demand.

And on the business side, there has been an uptick in activity when it comes to site selectors inquiring about the 413.

“We currently have more than 40 site searches going on, and that number has been pretty consistent for us over the past year or two,” he said. “And that’s a healthy number; it’s at the high end of what we’ve traditionally seen. It doesn’t mean that everyone is going to come here, obviously, but it does mean that people are out there looking.

“And the big difference this year, as opposed to perhaps few years ago, is that this interest comes in different sectors,” Sullivan went on. “We’ve always been historically attractive to the transportation and logistics companies because we’re at the crossroads of New England, and businesses can easily serve the Northeast given the Turnpike, I-91, and the other highways here, and rail and the airports. But we’re seeing the sectors increase, everything from manufacturing, which we had not seen a lot of, to cybersecurity and Big Data, such as the proposal for Westfield.”

Overall, Sullivan and others said the trends, both positive and negative, will continue into 2022, which should — and COVID will obviously have a lot to say about this — provide more than just a glimpse, or taste, of better times.

 

— George O’Brien

Economic Outlook

Optimism Abounds, but Many Factors Make It Difficult to Project

Bob Nakosteen started his discussion concerning the regional and national economy with a quick rejoinder that doubled as something to top everyone’s wish list.

“Well, if we put aside COVID…” he started while talking about the year ahead and, more specifically, about inflation and optimism that the Fed’s anticipated actions to raise interest rates will stem the rising tide of the past few quarters and bring it more under control in the months to come.

Overall (COVID notwithstanding), Nakosteen, a semi-retired professor of Economics at the Isenberg School of Management at UMass Amherst, said most factors involving the economy are positive — everything from consumer confidence to jobless rates; from a still-white-hot housing market to persistent pent-up demand for goods and services, especially the former.

Of course, you can’t take COVID out of the equation, as much as we all might like to, and that’s why predicting just what will happen in 2022 with regard to the economy and the many forces that drive it is still somewhat of a crapshoot.

Still, there is general optimism when it comes to the big picture and matters such as inflation — even though the Fed and others have dropped the word ‘transitory’ when talking about the issue — confidence, supply chain, the stock market, and perhaps even the workforce crisis, said Nakosteen and others we spoke with.

Karl Petrick

“The Fed wants to make sure it doesn’t jam on the brakes and raise interest rates so fast that they cause the recession they’re trying to avoid. It’s not good to get a recession named after you.”

Indeed, earlier this month, in a note to clients, Marko Kalanovic, JPMorgan’s chief global strategist, wrote, “our view is that 2022 will be a year of a full global recovery, and end of the global pandemic, and return to normal conditions we had prior to the COVID-19 outbreak.”

All that might still happen in the next 12 months, but the events of the past few weeks show that recovery may be slower, and perhaps not as complete as JPMorgan projects.

Karl Petrick, a professor of Economics at Western New England University, told BusinessWest that inflation should ease up in 2022 and retreat from highs of nearly 7% (year over year) in November to below 5% and perhaps to 4% or even 3% in the months ahead.

He said soaring gas prices, triggered by the laws of supply and demand as the economy started to roar back to life roughly a year ago, have been a big factor in soaring inflation, and they have already started to fall.

“It takes time for supply to meet that surge in demand, and as oil suppliers rebound, we expect to see that price come down, and we’re already seeing some moderation,” he said, adding that, if the impact of Omicron on the global economy is substantial — and already there are signs of slowdown and even shutdown in some countries — then demand for energy (and, therefore, the prices for same) will come down.

“Regardless, we expect to see inflation moderate,” he said. “It will still be a little uncomfortable compared to what we’re used to — we had gotten used to prices going up 2% or 1% a year, and that was part of the shock we felt as prices really started to jump the second half of this year — but things will improve.”

One key to what happens with inflation is action on interest rates, said Nakosteen and Petrick, noting that the Fed is certainly paving the way for higher rates. In mid-December, the central bank announced plans to phase out its large-scale bond-buying program faster than initially planned. That will give the Fed more flexibility to raise rates, and 12 of the 18 members of the Fed’s rate-setting committee expect rates to rise by three-quarters of a percentage point or more in 2022.

While such action is expected to keep higher inflation from becoming more entrenched, there are risks and costs to raising rates, said Petrick, adding that the Fed wants to keep inflation in check without slowing the pace of growth or, far worse, putting the country on a course to a recession.

That’s what happened in the early ’80s, he said, when then Fed Chairman Paul Volker elevated interest rates to historic levels, which triggered a recession that, in many historical references, bears his name.

Bob Nakosteen

Bob Nakosteen

“I don’t think the Fed is going to have to raise interest rates to the point where it’s going to dip us into a recession.”

“The Fed wants to make sure it doesn’t jam on the brakes and raise interest rates so fast that they cause the recession they’re trying to avoid,” Petrick said. “It’s not good to get a recession named after you.”

Nakosteen agreed, and said that, overall, he’s in the camp that believes that higher inflation as was seen over the last three quarters of 2021 will be transitory — and not built into the economy, as others predict — but perhaps for a longer period than everyone would like. He also agrees that, while the Fed is talking tough about inflation and the need to keep it in check, its overall response will not be as tough as the talk.

“I don’t think the Fed is going to have to raise interest rates to the point where it’s going to dip us into a recession,” he told BusinessWest. “The economy is going to continue to grow, maybe not as quickly, inflation is going to come down over the next year, and interest rates are going to go up, but not by very much; it will affect the housing market and automobiles.”

Petrick agreed, projecting “pretty reasonable” growth for the year ahead, but adding quickly that events of even the past few weeks — the rise of Omicron and setbacks for President Biden’s Build Back Better program among them — have tempered some of those expectations.

“At the beginning of December, before we knew the Omicron variant was as prevalent as it was internationally, growth projections were pretty high, about 4% to 5% globally, and about 4% in the United States,” he said. “And then … those projections came down to about 3.7% to 3.8%, and now, with the doubts about the Build Back Better agenda getting through Congress, they’ve been downgraded again, to 3% to 3.5% on an annual basis next year — that’s the consensus that I’ve seen.

“But the first quarter will be pretty quiet, with about 2% growth, which was our average, pre-COVID,” he went on. “And that’s a big slowdown from this year, when we saw 5.5% growth overall, which was expected.”

As for the longer-term picture … Petrick said the consensus, if there is one, is that there will be continued growth in 2023, perhaps 2.5% to 2.9%. But as the events of the past few weeks have shown, things can change — and very quickly.

So projecting too far out is obviously difficult. For now, there is widespread if cautious optimism about which way the arrow will point in 2022.

But as Nakosteen noted, the past two long and mostly painful years have shown that there is simply no putting COVID aside. u

 

— George O’Brien

Features Special Coverage

By Jodi K. Miller, Esq. and Ryan J. Barry, Esq.

Jodi K. Miller

Jodi K. Miller

Ryan J. Barry

Ryan J. Barry

A woman injures her ankle while jogging and goes to the local emergency department for treatment. Despite her injury, she makes sure to go to a hospital in her health plan’s network. Some weeks later, she receives a significant — and unexpected — bill from an emergency department physician. While the hospital was in her health plan’s network, it turns out the treating physician was not. Her health plan paid a portion of the physician’s charges, but she is responsible for the remainder.

This type of ‘balance’ or ‘surprise’ bill has been an ongoing issue when patients receive care from out-of-network providers, some of whom then bill patients the difference between their charges and the health plan’s benefit payment for out-of-network services. These bills are often a surprise because the patient either was not able to choose an in-network provider or was unaware that the provider was out of network until after the services were rendered.

Recently enacted legislation at the federal level and in Massachusetts attempt to address this issue.

A new federal law, the No Surprises Act, went into effect on Jan. 1. The No Surprises Act imposes requirements on healthcare facilities and providers, as well as on health plans, in three key areas: emergency services, non-emergency services provided by out-of-network providers at in-network facilities, and air ambulance services. When those services are rendered, health plans must make a payment to the out-of-network providers, and patients are responsible only for the cost-sharing obligations they would have incurred had the care been provided in network (e.g., co-payments and deductibles).

If the provider does not accept the health plan’s payment, the plan and the provider must attempt to negotiate a reimbursement rate. If negotiations fail, the plan or the provider can initiate a dispute-resolution process to resolve the issue. In these cases, providers may not bill the patient more than the cost-sharing amount, and they are potentially subject to civil monetary penalties of up to $10,000 per violation if they do so.

The No Surprises Act also provides that out-of-network providers of certain scheduled services may not balance-bill patients unless the provider has given advance notice and obtained written consent from the patient. The act sets out specific requirements for the content of the notice, including a good-faith estimate of the costs incurred and a list of in-network options for the patient. This notice and consent process, however, is not available for out-of-network providers of emergency services and other ancillary services (such as anesthesiology, pathology, radiology, and other diagnostic services), or in circumstances where there no in-network provider is available.

Other provisions of the No Surprises Act, including disclosure requirements for both providers and health plans, also aim to increase transparency and consumer protections. Providers are required to publicly disclose and provide to patients a one-page notice about the balance-billing requirements and prohibitions of the No Surprises Act, as well as state law. As discussed below, Massachusetts, too, has recently imposed new disclosure requirements for providers.

Notably, the protections of the No Surprises Act do not apply to emergency services by ground ambulance providers. In those circumstances, out-of-network ground ambulance providers may still bill patients for significant balances, which are invariably a surprise to patients who had no ability to choose an in-plan ambulance provider in an emergency.
Regulations implementing the No Surprises Act have not been without controversy. Medical associations have criticized the regulations implementing the dispute-resolution process as unfairly favoring health plans. Health plans, on the other hand, have lauded the regulations, maintaining that the process will make healthcare more affordable and avoid unnecessary increases in health-insurance premiums.

On Jan. 1, 2021, Massachusetts passed its own law to address balance billing for non-emergency services. That law, which also took effect on Jan. 1, requires healthcare providers to disclose to patients certain information regarding their participation in patients’ insurance plans and patients’ financial obligations for scheduled procedures and services.

Generally, providers are required to tell patients whether they participate in the patient’s insurance plan. If the provider does not participate in the patient’s plan, the provider must disclose the charges and any facility fees for the procedure or service. The provider must also inform the patient they will be responsible for the charges and any facility fees not covered through the patient’s health plan and that they may be able to obtain the procedure or service at a lower cost from an in-network provider.

The law also imposes new requirements on in-network providers to disclose information to patients regarding charges for procedures or services. Providers must also inform patients if their participation in the patient’s health plan changes during a continued course of treatment and make various disclosures when referring a patient to another provider.

There are two consequences if a provider violates the Massachusetts law. First, if an out-of-network provider fails to provide the required notifications and information, the provider cannot bill the patient at all, except for any co-payment, co-insurance, or deductible that would be payable had the patient received the service from an in-network provider. Second, the commissioner of the Department of Public Health is authorized to fine non-compliant providers up to $2,500 per violation.

The recently enacted federal and state laws seek to provide protections to consumers to avoid inadvertent balance bills from out-of-network providers. As these laws go into effect at the start of the new year, providers and health plans should be ready to implement the requirements, and consumers should see fewer surprises in their mailboxes.

Jodi Miller and Ryan Barry are partners in Bulkley Richardson’s healthcare practice.

Features Special Coverage

The Year in Review

You could have called it ‘COVID — year 2.’ Many people did. It was supposed to be the year the pandemic was put in the rear view. But it didn’t work out that way. Instead, 2021 was a year in which COVID-19 not only stayed with us, but multiplied its impact in numerous ways, especially within the business community. The shutdowns, heavy restrictions, canceled events, and long lines for testing in 2020 gave way to vaccinations, a general reopening of the economy, and the return of many events and institutions — from the Big E to the Thunderbirds to the local chambers’ After-5 gatherings — in 2021. But there was also inflation, supply-chain issues, a workforce crisis, profound changes in how and where work is done, and something that came to be known as the Great Resignation. But it was also a year when the local cannabis industry continued to grow and broaden its already significant impact on the region, Smith & Wesson announced it was moving its headquarters to Tennessee, tourism bounced back in a big way, and the region lost one its iconic entrepreneurs and restaurateurs. It was another year to remember — or forget, depending on your point of view. With that, here’s a look back at the biggest stories of the past year.

 

 

COVID-19

Actually, COVID wasn’t one story; it was perhaps a dozen different stories all happening at once, some of which you’ll read about below. There was the virus itself, which evolved into different variants, including Delta and, most recently, Omicron. But there were many side effects from the pandemic, each one being a big story in its own way.

That list includes vaccinations — and there are several different aspects to that story — and also ongoing changes to the workplace, a workforce crisis spawned in many ways by the pandemic, supply-chain shortages, inflation generated by huge amounts of money being infused into the economy at a time when there were shortages of many items, and much more.

The news that everyone had been waiting for — the lifting of all restrictions placed on businesses as a result of COVID — came just before Memorial Day. BusinessWest announced this critical turn with the cover headline ‘The Next Stage.’ In actuality, the next stage wasn’t all that most businesses thought it would be, as many of them were now facing new challenges, such as severe labor shortages, the inability to order parts and supplies, lingering issues regarding remote work, and, much later, matters regarding vaccination (more on all these later).

“In most all respects, things were much better in 2021 than they were in 2020, but ‘normal,’ as in pre-COVID, was elusive for many businesses, large and small.”

Still, in most all respects, things were much better in 2021 than they were in 2020, but ‘normal,’ as in pre-COVID, was elusive for many businesses, large and small. From car dealerships with very few new cars on the lots — and used cars taking up showroom space — to restaurants having to close an extra day during the week because they couldn’t get enough help, there were many signs that the pandemic wasn’t going to be relegated to the past tense any time soon. And with the number of cases and hospitalizations spiking this month, it seems certain there will be a ‘year 3’ of COVID — and, for now, great uncertainty about what that will bring.

The Workforce Crisis

Perhaps the most enduring image from this past year, at least within the business community, was the help-wanted sign. It appeared in the window of every kind of business imaginable, from restaurants to manufacturing plants; from roofing companies to landscapers; from golf courses to supermarkets. The list goes on. Everyone was looking for help. And most of them still are.

Indeed, what can only be called a workforce crisis shows no signs of letting up, with signs saying ‘Help Wanted,’ ‘Join Our Team,’ and ‘We’re Hiring’ still dominating the landscape. BusinessWest covered the story extensively and from many different angles in 2021, interviewing everyone from law-firm managing partners to hospital administrators to restaurant owners. They were all saying the same thing: good help is very hard to find, and for many reasons.

For much of the year, one of the presumed factors was attractive (many would say too attractive) federal unemployment benefits. But when those benefits ended in September, the problem did not improve appreciably. Meanwhile, the workforce crisis has had a number of side effects of its own, including higher wages, the need for sign-on bonuses and other incentives, and, most importantly, lost business opportunities from simply not having enough help. And the matter of finding help became greatly complicated by the growing need for help.

“Perhaps the most enduring image from this past year, at least within the business community, was the help-wanted sign. It appeared in the window of every kind of business imaginable.”

That’s why the phrase ‘Great Resignation’ entered the lexicon in 2021, a reference to the millions of people who left their jobs over the course of the year for reasons ranging from the ability to retire early to job dissatisfaction to mandated vaccinations. Overall, it was a good year to be looking for work, and a very difficult year for those looking for help.

 

Inflation and the Supply Chain

‘The Rising Cost of Everything.’ That was the headline on a BusinessWest cover story in late May. That same headline could have worked in every month since. Indeed, the price of just about everything, from steak to lumber to used cars, kept heading skyward.

Last month, in fact, inflation hit its highest point in almost 40 years. The Consumer Price Index, which tracks the price of a broad range of goods, rose 0.8% in November and is up 6.8% from a year earlier. The biggest risers included food, housing, cars (both new and used), and gasoline. Energy costs in November were up 33% over a year earlier, food costs were up 6%, and used car and truck prices climbed 31%.

The most recent echo of such severe inflation took place in the 1970s, a situation spurred by disruptions in global oil supplies. Inflation rose from below 3% in 1972 to above 13% in 1979, prompting the Federal Reserve to hike interest rates to as high as 20%. By 1982, inflation had receded, but the experience shaped monetary policy for decades.

“One of the main drivers to the current inflation crisis, of course, has been a broken global supply chain — an issue with so many interlocking factors, it’s hard to see it resolving any time soon.”

One of the main drivers to the current inflation crisis, of course, has been a broken global supply chain — an issue with so many interlocking factors, it’s hard to see it resolving any time soon. The earliest factor was a widespread economic shutdown in the spring of 2020; when the economy began reopening at high speed later that year, supply chains — for products like steel, lumber, and other key supplies — were slow to respond to growing consumer demand, and never caught up.

Add in serious delays in freight shipping, a bottleneck of shipping containers across the globe, and a persistent shortage of workers, and the result is additional strain on businesses and soaring prices all the way down the supply line — which eventually reach consumers in the form of, you guessed it, inflation. Untangling all of this will be one of the big challenges facing policymakers and business leaders in 2022.

 

Changes in the Workplace

If 2020 was the year of remote work, then 2021 was the year of deciding if, when, and under what circumstances people would continue to work remotely. And for many businesses, deciding just what to do became a stern challenge.

Many arrived at a hybrid format as the most common-sense solution, a mixed approach that had employees working remotely most days but in the office at least one or two. However, many employees, citing how well they worked at home, questioned whether the hybrid approach was needed or even effective.

Meanwhile, the changing dynamic created still more challenges for those confronting the ongoing workforce challenge. Indeed, beyond salary, benefits, and workplace culture, many job seekers put the ability to work remotely high on their wish list — or demand list, as the case may be.

Sarah Rose Stack, recruiting director for Holyoke-based Meyers Brothers Kalicka, summed things up poignantly in a piece she wrote for BusinessWest in October. “Employees are actively seeking remote or hybrid work opportunities just as many companies are now demanding that employees return to in-person work,” she explained. “Some have even pre-emptively started seeking flexible work opportunities out of fear that their current remote-work situation might change. Many are expressing that the ability to work from home and have more flexible work schedules in general have helped to prevent burnout. People have enjoyed ditching the morning commute and 5 p.m. rush hour. The returned pockets of time have come with myriad benefits, including more sleep, more time with family before and after work, less wear and tear on vehicles, more time with pets, and an overall more comfortable environment.”

“If 2020 was the year of remote work, then 2021 was the year of deciding if, when, and under what circumstances people would continue to work remotely. And for many businesses, deciding just what to do became a stern challenge.”

But while remote work presents challenges, there are opportunities for businesses as well; managers in many different sectors told BusinessWest that remote work gives them the opportunity to recruit talent from across the country, not simply from within the 413. That same opportunity could be a boon for this region and, especially, rural areas like the Berkshires and Franklin County, which offer quality of life, lower cost of living, and, now, an opportunity to live there and work almost anywhere. Like many of the stories on our list, this one will take some time to play out.

 

Smith & Wesson Heads to Tennessee

The press release found its way into the inbox of area media outlets early in the morning of Sept. 30. And it was a bombshell. Smith & Wesson President Mark Smith was announcing that the company was moving its corporate headquarters — and roughly 500 jobs — from Springfield, where the company was launched more than 150 years ago, to Blount County, Tennessee.

The stated reason was that the company did not want to remain headquartered in a state where legislation had been filed that would ban the manufacturing of more than half the products (specifically assault weapons) made by the company. Smith & Wesson’s new home is a county that bills itself as a ‘Second Amendment sanctuary.’

While the stated case for leaving was greeted with significant skepticism — many elected officials stated that the company was simply taking advantage of huge tax breaks and other incentives — there was considerable discussion about just what Springfield and this region would be losing. The 500 jobs were at the top of that list, obviously, but some were saying the city was also losing some of its business and manufacturing heritage (even if 1,000 of the company’s jobs were staying in the city) and some bragging rights, given that S&W is among the most recognizable brands in the world.

As for the lost jobs, some elected officials, and some area manufacturers as well, see this as an opportunity for the region, given the ongoing workforce crisis and shortage of good help (see how the stories on this list are all interconnected?). One firm, Indian Orchard-based Eastman, actually started advertising directly to those impacted Smith & Wesson workers, welcoming them to seek work at that firm.

 

Cannabis Continues to Flourish

In the three years and one month since NETA opened on Conz Street in Northampton and became the state’s very first dispensary for legal, recreational cannabis, almost 200 cannabis businesses — not just retail shops, but growers, manufacturers, labs, and wholesalers — have cropped up across Massachusetts. Last month, total sales in Massachusetts crossed the $2 billion mark … and the second billion arrived in a much shorter timespan than the first billion.

What this tells industry proponents is that constant expansion of competition isn’t simply spreading out a limited pool of customers; it’s creating more, and many believe there remains a significant well of individuals who haven’t yet turned on, but will eventually, as they hear good things from friends and family and the last barriers of stigma fall.

Locally, that’s good news on a couple of economic fronts: municipal tax revenues and jobs. In Northampton, for instance, which boasts at least 20 cannabis-related businesses, excise taxes have brought in more than $4.3 million over three years, to help pay for much-neede city services. And just down the road in Holyoke, a surge in employment in this new industry — hundreds of jobs and counting in that city alone — has led to new job-training programs to feed the growing demand.

If there has been one hiccup, the Cannabis Control Commission’s stated commitment to social-equity opportunities — with the goal of helping communities and demographics negatively impacted by the war on drugs to access entrepreneurship opportunities in cannabis — has met with inconsistent results. But commissioners have heard those complaints, and the conversation continues.

“Last month, total sales in Massachusetts crossed the $2 billion mark … and the second billion arrived in a much shorter timespan than the first billion.”

Meanwhile, the sheer number of cannabis businesses in Massachusetts is actually making it easier for all players — even small ones — to succeed, because of the cross-pollination making vertical integration less of a necessity these days. It’s an industry of many niches, and every niche is reporting tremendous oppportunity.

 

Tourism Industry Rebounds

While full recovery is still a ways off, the region’s large and vital tourism and hospitality industry staged an inspiring comeback in 2021. The biggest story, on many levels, was the return of the Big E after a one-year hiatus due to COVID. The 17-day fair drew large crowds — nearly 1.5 million in total — and on the final Saturday, it topped the all-time single-day attendance mark with 177,238 visitors.

Meanwhile, the fair boosted the fortunes of a number of other businesses, from hotels and restaurants to tent-renting companies. But there were other signs of progress as well, including solid visitation numbers at a renovated Basketball Hall of Fame, the return of live performances at Jacob’s Pillow and a host of other cultural venues, a steady if unspectacular year for MGM Springfield, and, of course, the return of the Springfield Thunderbirds, which were in first place as of this writing.

As for restaurants, they rebounded as well, with patrons returning in large numbers, especially after the state lifted all restrictions on such businesses just before Memorial Day. But for most all restaurants, reopening came with challenges, especially on the workforce side, with many forced to close more than one day a week (the traditional number) because of a lack of workers.

“While full recovery is still a ways off, the region’s large and vital tourism and hospitality industry staged an inspiring comeback in 2021. The biggest story, on many levels, was the return of the Big E after a one-year hiatus due to COVID.”

As for hotels and event venues, weddings and similar events returned in full force, but the story was different on the corporate side, with travel and events still well below pre-COVID levels. So, while the tourism sector has recovered to some degree, there is still some work to do.

 

The Vaccination Issue

Businesses already facing a number of challenges as a result of COVID were handed another with the arrival of vaccinations to combat the virus.

The efficacy of vaccines isn’t in doubt. While they don’t totally prevent spread or infection, their impact on severity is well-documented, with hospital ICUs reporting that 95% or more of the most severe cases — and deaths — in 2021 have been among the unvaccinated. And those deaths are nothing to scoff at. As the pandemic approaches the end of a second year, the U.S. is about to surpass 800,000 deaths from the virus, hitting the elderly the hardest; roughly one in 100 older Americans has died from the virus, while, for people younger than 65, that ratio is closer to 1 in 1,400.

So it’s natural that business and political leaders have been frustrated by vaccine hesitancy among wide swaths of Americans. While the vaccines have certainly prompted decreases in cases, hospitalizations, and deaths from COVID, they have left employers with hard decisions — and some dilemmas.

“While the vaccines have certainly prompted decreases in cases, hospitalizations, and deaths from COVID, they have left employers with hard decisions — and some dilemmas.”

Many business owners didn’t want to be in a position to require vaccinations, but this fall, the Biden administration made the decision for them, requiring vaccinations for all businesses with more than 100 employees and those working on federal contracts (or subcontracts), healthcare workers, and federal government workers.

Legal challenges have gone back and forth on these vaccination mandates, putting the mandate for federal workers in limbo for a time (though it’s back on for the time being), while private employers moving forward with the mandate must cope with employees leaving because they don’t wish to be vaccinated, adding to an already-difficult workforce environment. It’s another story that will play itself out over the coming weeks and months.

 

Data Center Proposed in Westfield

It’s being called the largest private-sector development proposal in the region’s history. That some of the language attached to a plan to build a $2.7 billion data center on a 165-acre parcel off Servistar Industrial Way in Westfield.

The proposal’s developers, Servistar Industrial Realties, have presented plans calling for a complex of 10 buildings totaling more than 2.74 million square feet, with projected customers expected to include the likes of Google, Microsoft, Amazon, Apple, and Facebook. The project, which still has a number of hurdles to clear before it becomes reality, has received approval from the Planning Board and City Council, with the state now considering a 40-year tax-abatement package.

The developers focused in on Westfield and the large parcel in question — actually, several smaller parcels knitted together — because the site could check a number of boxes, including the ability to draw power, and large amounts of it, directly from the grid, as well as access to a reliable, high-speed fiber communications network. Competitive cost of doing business is also high on the list, as is a skilled workforce and easy access to major markets.

Area economic-development officials note that, while sites for such massive initiatives, called ‘hyperscale’ projects, are rare, there is the potential for smaller-scale data-center ventures, and success with the Westfield project could create other opportunities for the region.

 

Housing Prices Soar

Have you tried to buy a house lately? How frustrating has it been?

Probably plenty frustrating, because of a simple supply-and-demand equation: there are far fewer available houses on the market, especially in Western Mass., than there are buyers, and that’s caused prices to soar. Homes are often publicly on the market for a day or two before they’re snapped up, often at more than the asking price, sometimes without an inspection.

Statistics from the Realtor Assoc. of Pioneer Valley bear this out. Last December, home sales in the Pioneer Valley were up 29.2%, and median price was up 10.1%, from December 2019. And the trend has continued through 2021, with sales down slightly from 12 months earlier, but the median price up another 15%.

A few different factors have been in play. Since the start of the pandemic, especially since the advent of widespread remote work, families have been trying to escape urban areas, driving sales in Berkshire and Franklin counties, but also in more populous Hampden and Hampshire counties as well. Demand has outpaced supply, and home buyers aren’t putting their own houses on the market until they’ve got a new home nailed down.

Meanwhile, interest rates have been at historic lows, even creeping below 3%. “The rates are so low that a lot of people are realizing it’s much cheaper than renting,” Realtor Tanya Vitale-Basile told BusinessWest earlier this year, adding that sellers from the Boston area find they can get much more living space for their money in the Pioneer Valley.

In short, families spending much more time at home have decided they want a different one — and for many, it’s been tough to buy one.

 

Other Stories from 2021

There were many of them, including the death in May of serial entrepreneur and restaurateur Andy Yee. What would have been his 60th birthday a few weeks later was one of the bigger parties of the year. It was a celebration of a life well-lived.

There was a loss of another kind in late November, when a four-alarm fire ravaged the Maple Center Shopping Plaza in Longmeadow, which left five businesses, which collectively employed 74 people, homeless. The community has rallied around the business owners and employees to help them recover.

In news that affects businesses of all kinds, 2021 will be a record-breaking year for data breaches. According to Identity Theft Resource Center research, the total number of data breaches through three quarters has already exceeded the total number of events in 2020 by 17%, with 1,291 breaches from January through September 2021 compared to 1,108 breaches in 2020.

Ambitious proposals for east-west rail, connecting Pittsfield and Boston along the southern half of the state and North Adams and Boston up north, have gained steam, with MassDOT just last week convening stakeholders and launching a study of the latter. Meanwhile, north-south service on the Amtrak Valley Flyer and Vermonter lines was restored over the summer after pandemic cutbacks.

“In news that affects businesses of all kinds, 2021 will be a record-breaking year for data breaches. According to Identity Theft Resource Center research, the total number of data breaches through three quarters has already exceeded the total number of events in 2020 by 17%, with 1,291 breaches from January through September 2021 compared to 1,108 breaches in 2020.”

Plans by Carvana to build a large car-processing facility in Southwick were scuttled over the summer when the company withdrew its proposal hours before a public meeting where residents were expected to oppose it by a wide margin, mainly due to traffic concerns.

One ongoing story from 2021 is an apparent surge in entrepreneurship prompted by COVID and its many side effects. Indeed, the pandemic left many with the time and inclination to move on with their dreams of owning their own businesses, and many of them seized the opportunity, with new ventures ranging from breweries to a Latino marketing agency to a wine-distribution business.

As for BusinessWest, it was a busy year, especially when it came to events. Due to COVID, there were actually six this year, with two slated for late in 2020 rescheduled for this past January. Live events returned with a raucous 40 Under Forty gala at the Log Cabin in September, followed by the Healthcare Heroes and Women of Impact celebrations in October and December, respectively. Nominations are open for these recognition programs for 2022.

 

Banking and Financial Services Special Coverage

Seeking a Return

Paul Scully says customers are feeling more optimistic about the future.

Paul Scully says customers are feeling more optimistic about the future.

While year one of the pandemic taught banks how to constantly pivot — to remote work, new modes of serving customers, and multiple phases of PPP loans — year two has brought more stability, even normalcy, but also new challenges, particularly inflation and supply-chain disruption that has made it more difficult for customers to save, borrow, and invest. That they’re doing all these things, to some degree, lends a healthy sense of optimism to 2022.

 

There’s nothing wrong with normalcy, Paul Scully said.

And if nothing else, the business of banking in 2021 was more stable than in 2020. That doesn’t mean all the economic issues individuals and businesses are dealing with have gone away, just that banks, and businesses in general, had to do less pivoting. Or at least have learned to roll with the punches.

“With vaccination rates increasing — or at least the availability of vaccinations up — we saw business picking up and customers feeling more confident coming into the banking centers,” said Scully, president and CEO of Country Bank. “And with commercial business picking up, people were feeling a little more optimistic with what the future has in store for them — where 2020 was all about trying to figure out what the heck was going on.”

What was going on last year were the early throes of a pandemic with no vaccines available, widespread shutdowns of economic activity, and banks more involved in PPP loans than normal commercial activity. “But we started to see, probably by the second quarter of this year, a normalizing, with customers feeling more confident and feeling more optimistic about the future and for their business.”

“With commercial business picking up, people were feeling a little more optimistic with what the future has in store for them — where 2020 was all about trying to figure out what the heck was going on.”

That’s a positive trend for commercial lending. Glenn Welch, president and CEO of Freedom Credit Union, was on an economic-outlook call with Visa recently, which projected a 7% uptick in 2022 in business investments in fixed assets, which means more borrowing. “That’s pretty healthy growth,” he told BusinessWest. “People are looking to borrow out there. Corporations’ financial statements are looking pretty strong the last couple of years, and a lot of consumers are sitting in pretty good financial shape; we’ll see whether they want to pull the trigger or not.”

On the consumer side, they have, with 2021 being the second straight year of double-digit growth on the mortgage-lending side at Freedom, along with healthy business in auto and home-equity loans. “And last year, deposits were up over 20%; this year, it was 10%. Our balance sheet, like many institutions, has grown pretty significantly since COVID hit.”

Tony Liberopoulos, Liberty Bank’s senior vice president and regional manager for Commercial Banking, said the bank’s new commercial-lending push in Western Mass. — it opened a loan-production office in East Longmeadow in June and has added three more employees since then — has gone well.

“We’ve been very happy. We had a very strong year; we’ve been very busy,” he told BusinessWest, noting that much of that success can be attributed to customers craving normalcy — in this case, face-to-face dealings with a stable team.

“With the amount of market disruption between mergers, community lenders leaving their jobs for other opportunities, and, in many instances, competitors still working from home, we’ve had opportunities to meet prospects and clients to grow our business,” he explained.

Tony Liberopoulos

Tony Liberopoulos says borrowers want access to digital tools, but mainly prefer face-to-face interactions.

“We’re firm believers that, while businesses have been struggling with things like COVID and supply chains, things will bounce back,” he went on. “And we’re seeing a lot of opportunities just by being in front of the clients. They want to see familiar faces; they don’t want to deal with just Webex and phone calls.”

Liberty’s lending numbers have borne that out, with 2021 figures close to what they were pre-COVID, Liberopoulos added. “That’s all we can ask for at this point. We’ve found customers and prospects still want face-to-face meetings; they want a normal relationship with banks.”

With that in mind, “I think the trend is toward more confidence in 2022 than there was in 2021,” he went on. “I think companies have seen their business come back since late May, early June, when a lot of COVID restrictions were lifted. We’re seeing businesses thrive again, and now they’re starting to invest in 2022. That’s what we’re counting on.”

 

Into the Digital Age

While many customers do, indeed, prefer to bank in person, Scully said, one of the big industry stories of the pandemic was how customers who had avoided digital banking options embraced them when they had to — and then stuck with them.

“More and more people developed a comfort level with technology,” he explained. “Many had a fear of the unknown — ‘will my money be safe?’ But the last 20 months allowed people to recalibrate a little bit, and we’re seeing more and more reliance on technology, which is great.”

Country even converted a small branch in the Ware Walmart to an interactive banking office with two interactive teller machines (ITMs). “They can absolutely do anything on the machine. The customer response has been really positive.”

Technology has helped banks in other ways — including combating a workforce shortage that has affected every industry and has not spared banks and credit unions.

“The fact that there aren’t a lot of employable people out there is taking its toll on businesses. Anyone in a customer-service business is looking for people; it doesn’t matter whether if you’re running a bank or a local coffee shop.”

“Honestly, it doesn’t matter what business you’re in these days, the fact that there aren’t a lot of employable people out there is taking its toll on businesses. Anyone in a customer-service business is looking for people; it doesn’t matter whether if you’re running a bank or a local coffee shop.

“But that customer expectation still exists for us, so technology has helped quite a bit,” Scully went on. “Customers during the pandemic became more familiar with doing their banking through technology, and their reduced reliance on coming into the branch reduced some of our traffic.”

At Country, while the banking centers operate five or six days a week with in-person staff, in the back-office areas, employees remain on a hybrid schedule, three days in the office, two remote — with Wednesdays mandatory for everyone to come in. “That’s more of a cultural thing for us, so folks would still be connected to one another.”

And the hybrid model has worked well, he noted. “We recognized early on, as we started to look at the reopening process, there are a lot of benefits to having a hybrid workforce. It’s like 2020 allowed us all to recalibrate, and ask why you’re spending an hour twice a day commuting to the office just to do work you were able to do at home for a year. We decided, ‘let’s rethink this.’”

Staffing has also been a challenge for Freedom, Welch said, which had to close down a branch or revert to drive-up only on occasion to deal with it.

Glenn Welch

Glenn Welch says workforce issues have not only affected staffing for banks and credit unions, but have begun to put pressure on wages.

“We’ve seen other institutions have the same issue. We’re certainly trying to hire people, but it’s been difficult. People leave, and it’s hard to get people interested in coming in and working. I don’t know if it’s because it’s a retail environment — that’s where most of our openings are, in branches — or it’s just people retiring or finding other things they want to do.”

The crunch has started to put pressure on wages, Welch added, which not only affects the banks themselves, but often doesn’t do enough to balance surging inflation for those earning the paychecks.

Liberopoulos said the shift toward digital banking options is a good one, and even though many of his commercial clients have wanted to do business in person, they, too, also want to be able to access the same digital experience — with its speed, flexibility, and personalization — that consumer clients have.

“Innovation is always the key to growth and sustainability. To survive, you need to invest not only in talent, but in products and services,” he said, noting that there’s certainly a need for both online options and a bricks-and-mortar presence.

 

Back to the Street

Communities and nonprofits saw their needs soar during the pandemic, too, and that’s one area community banks and credit unions continued to focus on in 2021. For example, over the summer, Country Bank — which has traditionally focused its giving on basic needs like food insecurity, homelessness, and healthcare — donated a total of $1 million to two regional food banks.

“To be a healthy community, residents in the community need to be in good health. Nutrition should be a right and not a privilege,” Scully said, noting that needs became more dire due to the pandemic, job losses, inflation, and an increase in addiction.

“If you have a heartbeat, you enjoy giving back, and it doesn’t have to be a certain size,” he said, turning the topic around as a challenge to others. “You may be able to donate only a dozen boxes of pasta, but that’s a dozen more boxes of pasta available for someone in need. What we like to do is partner with organizations and get their stories out there, so other people can jump on the bandwagon and be a part of it too.”

That speaks to Liberty’s priorities as well, Liberopoulos said. “We’re very in tune with our community and helping out the non-for-profits; we’ve done a lot of good things so far and continue to do that. That’s very important to us. We live, work, and lend in this area, and we want to support this area as well.”

Welch said Freedom has not only supported nonprofits, but gotten others involved by choosing a charity each month — A Bed for Every Child, the Walk to End Alzheimer’s, and Unify Against Bullying are just three recent examples — and involving members in the giving.

“We have been advertising that on our website and trying to get donations not only from the credit union, but from members who find the causes worthwhile and have the ability to donate,” he explained.

As for member business in the coming year, Welch knows inflation remains a drain on savings and assumes interest rates will rise at some point in an attempt to slow it down. “That could have an impact on people being able to borrow. Student-loan payments are starting up again, too, so people will have $300 or $400 coming out of their pocket for that in addition to increased prices and increased rates.”

These are problems that affect businesses, too, Scully said.

“With inflation and the cost of goods going up, and so many businesses looking at inflated utility expenses, now, with the shortage of qualified, available help, payroll tends to go up as well,” he noted. “Clearly there are a lot of challenges for folks in the business arena — which is why you really want to encourage people to shop local and keep Main Street storefronts occupied.”

Many businesses struggling with higher costs are still looking to borrow and invest, he added. While the PPP loans of 2020 were about keeping the lights on and keeping employees paid, for more traditional loans going forward, borrowers need to show a continuation of revenue streams without the PPP revenue to bolster them.

“For the most part, that’s exactly what happened. Businesses have returned to a good level,” Scully said. “Certainly, some are still taking their hits — hospitality was one of the hardest-hit, whether it’s food services, hotels, or entertainment venues. They had tough restrictions put on them last year. Those restrictions were lifted for the most part, but now they can’t rehire enough workers.”

These are all factors that might cause individuals and businesses to pull back from borrowing, he added.

“What will the impact of inflation be? When will interest rates start to rise a little? The big piece that looms for me is employment: where is the workforce going to be? Will there be enough employable people for all of the jobs? We’ve heard about this Great Resignation. It’s real.”

Still, like other financial leaders we’ve spoken with recently, Scully remains optimistic. “All indications suggest 2022 should be an OK year from a business perspective.”

 

Joseph Bednar can be reached at [email protected]

Business of Aging Special Coverage

‘We’re Like a Cruise Ship’

By Mark Morris

Cheryl Moran supervises a balloon volleyball game

Cheryl Moran supervises a balloon volleyball game at the Atrium at Cardinal Drive.

Visit any senior-living community and it’s easy to notice all the activities residents take part in. But there’s more to all that activity than just fun and games.

Indeed, while providing entertainment, activities also contribute to the well-being of seniors in every setting, from independent living to assisted living and memory care, and even in skilled-nursing facilities.

It all begins with crafting an activities calendar. Sondra Jones, chief marketing officer for the Arbors Assisted Living communities in Amherst, Chicopee, Greenfield, and Westfield, said residents have a full schedule of activities from 9 a.m. to 7 p.m. They can take part in anything from exercise sessions to religious services to food classes and lectures. On one sunny day in October, residents in Chicopee took part in an outdoor drumming circle. Calendar offerings change all the time based on the types of activities that interest residents the most.

“Because people live here, we’re in essence an apartment building,” Jones said. “And in some ways, we’re like a cruise ship, because residents have all their meals and activities here, too.”

Even with nearly a dozen scheduled activities available each day, some residents might want to take part in something that’s not on the calendar. That’s OK with Cheryl Moran, executive director at the Atrium at Cardinal Drive in Agawam, who noted that this is their home and the staff are visitors in the home.

“The activities our residents take part in are all geared to keeping these skills a part of their everyday life. When they begin to struggle with a skill, we step in and help them find a different way to succeed.”

“One woman likes to spend her time doing crossword puzzles, and another just likes to paint because it makes her feel like an artist,” Moran said.

Heidi Cornwell, director of Marketing & Sales for Kimball Farms Life Care in Lenox, said most facilities make sure they cover five key areas when planning an activities calendar: gross motor skills, socialization, self-care, sensory, and memory. Specific activities are usually modified to fit a particular setting to help everyone keep moving and engaging as part of their daily routine.

“The activities our residents take part in are all geared to keeping these skills a part of their everyday life,” Cornwell said. “When they begin to struggle with a skill, we step in and help them find a different way to succeed. We work very hard to be a failure-free environment.”

According to Lori Todd, executive director for Loomis Lakeside at Reeds Landing in Springfield, when a person needs medical attention in a skilled-nursing setting, activities remain an essential factor in the patient’s recovery.

“Activities definitely help patients by encouraging the kind of wellness behaviors that contribute to the healing process,” she said.

Meanwhile, in settings such as assisted living, the level of functioning varies from person to person. Moran said she likes to have everyone together because it creates a dynamic in which people of different levels of function help each other with activities or just daily life.

Residents at the Arbors in Chicopee

Residents at the Arbors in Chicopee participate in an outdoor drumming circle.

“Our high-functioning residents enjoy helping people in wheelchairs or those who need help in some other way,” she told BusinessWest. “For the person who functions on a higher level, it gives them a sense of purpose.”

 

Much More Than Bingo

In the past, senior-living activities usually concentrated on gathering for bingo. While bingo remains popular, Todd said many group activities now aim to incorporate exercise so they can combine something fun with meeting a patient’s rehab needs at the same time.

“When setting up the calendar, we make sure to include plenty of wellness activities, whether they are emotional, physical, social, reminiscing, basically anything that helps memory or keeps people physically active,” Todd said. They also insert fun social activities such as a happy hour with an entertainer. “We strive for feel-good activities as well as ones that promote healing.”

Physical and social activities are certainly not limited to schedules on a calendar. Cornwell discussed how the actions of a resident leaving their apartment, walking down the hall, perhaps taking an elevator, and then walking to the dining area all contribute to physical activity. Once they arrive, they sit with a friend or neighbor and then engage in conversation, which adds to their social experience.

“When setting up the calendar, we make sure to include plenty of wellness activities, whether they are emotional, physical, social, reminiscing, basically anything that helps memory or keeps people physically active.”

“This is where senior living provides much more physical movement than if the person was at home,” she added, “where a caregiver brings them a meal and they might not leave their chair all day.”

Activities involving music are popular in every senior-living setting. While singers are not yet allowed in most places due to COVID-19 concerns, Cornwell said it’s a form of therapy when violinists, pianists, and other musicians come to play.

“Studies show music touches a part of the brain and leaves a positive impact,” she noted. “Music goes a long way toward self-care and helps people feel better about themselves.”

Jones credits her activities staff for finding an innovative way to include singers into music performances while still following COVID mandates.

“We had singers outside in the courtyard area while the residents gathered in the library with the doors open so they could see and hear the entertainment from a safe distance,” she said.

As mandates continue to gradually ease, everyone who spoke with BusinessWest expressed gratitude for all the difficult work the staff at senior-living communities performed during the worst days of the pandemic.

At the height of COVID, residents were essentially quarantined in their apartments, so staff at each facility made an extra effort to stay engaged with them.

Residents at Kimball Farms engage in tai chi.

Residents at Kimball Farms engage in tai chi.

“Our resident-care attendants and activity teams all turned into nail technicians, hairdressers, and personal stylists,” Cornwell said. “They did everything to keep residents looking good, feeling good, and feeling like someone cared.”

At the peak of the pandemic, when frequent temperature taking was essential, staff would dress up as a lion or some other whimsical costume just to get a laugh out of the residents.

One common practice at several facilities involved opening apartment doors and encouraging residents to socialize from the entrance of their unit. Staff would also use the hallway as the focal point for a bingo game and, in one instance, as a socially distanced bowling alley. “All the staff found creative ways to keep things social,” Jones said.

Added Cornwell, “the pandemic has been difficult and extremely challenging. Our residents rallied, and I give our staff 100% props for their out-of-the-box thinking to keep people safe and engaged.”

Before vaccines were available and while COVID was rampant, Todd said patients at the skilled-nursing facility at Loomis Lakeside at Reeds Landing could not have any visitors in their rooms. Fortunately, that unit is located on the first floor.

“Families were able to visit their loved ones through the window and could communicate by phone or iPad through the glass,” she explained. “We wanted to address social isolation while at the same time keeping everyone safe.”

Without that effort to engage with residents, the lack of socialization can quickly lead to depression, Jones noted. “Once they could leave their rooms again, I heard one woman say to another, ‘I haven’t held anyone’s hand in so long.’ Social interaction is a good distraction.”

For nearly four years, Gladys Fioravanti has lived at the Arbors in Chicopee. She believes activities are an important part of staying healthy.

“If you sit in your room day after day, you start thinking too much,” Fioravanti said. “You think of your loss, then you break down and cry and need some pills to calm you down, so I think it’s good to have something to do.”

She takes part in a number of activities because they keep her busy, but not too busy.

“I like the exercise class in the morning followed by the Mass right after,” she said. “After exercise, the Mass allows you to cool down.”

One afternoon, Fioravanti was sitting in the library area with several friends, including Claire Henault, whom Fioravanti met at the Arbors.

“We play cards together,” Fioravanti told BusinessWest. “We cheat together — I mean, Claire cheats.” At which point Henault chimed in, “I can’t be cheating because I never win.”

 

Moving Toward Normalcy

While residents are free to move around their facilities, families are not yet allowed in common areas but may visit loved ones in their apartments, where they can eat in the unit or take the resident out for dinner. Before COVID, families could join the loved ones during activity time.

“Recently, a family member called just to ask when they can attend the activities again because they enjoyed it too,” Moran said.

All the managers praised the patience families showed during the worst days of COVID. Since the beginning, Cornwell said, they have educated families on the latest protocols and good safety habits. “And we’re still educating them.”

The use of iPads and other tablets were a key to connecting families with their loved ones when no visitors were allowed. Cornwell said Kimball Farms parent Berkshire Healthcare Systems invested in tablets so residents could speak to family members on Skype or FaceTime. Even for residents who were aphasic and had trouble with verbal communication, that connection was still important for all involved.

“Even if the resident couldn’t verbally express their feelings, they could at least see the faces of their loved ones and hear their voices,” Cornwell explained. “Family members were able to see the resident’s smile and maybe even some blush on their face when our care attendants would put some makeup on them to help them look beautiful for the camera.”

As more people receive the COVID vaccine and booster shot, Moran hopes to eventually see families back inside the Atrium at Cardinal Drive.

“It’s enjoyable when we have lots of people here with the residents and the families are all talking with each other,” she said. “I don’t know when we’ll be able to invite everyone back in, but I hope we eventually can because I miss them.”

Like many industries, senior care is always looking to add more staff. Still, Jones noted, while the Arbors had some challenges, staffing is not a big issue.

“We have several staff members who have been with us for more than 20 years,” she said. “We will always have turnover, but we also have a core of stable employees, so that’s a real positive.”

During the height of COVID, Moran hired a number of Harbor Universal Associates (HUAs) to accommodate residents who may want coffee before 9 a.m. when breakfast is served. By having this extra staff person to help and engage with residents, Moran can offer what she called parallel programming.

“We may have one main activity going on in the center of the room, while several smaller groups are doing what they want around the perimeter,” she said. “The HUAs provide that added level of support for our residents who want to do their own thing.”

When a family comes to visit a new resident, Jones said, her goal is to be able to tell them, “your mom is busy right now.”

Ultimately, she added, all the activities available for seniors creates what she called a healthy distraction. “It beats having dinner with Pat and Vanna every night.”

Business of Aging Special Coverage

Breaking Through

By Mark Morris

Sina Holloman has grown HomeCare Hands

Sina Holloman has grown HomeCare Hands to more than 200 caregivers and employees.

Back in 2003, Sina Holloman discovered she loved working with seniors in a one-on-one setting. That passion eventually inspired her to start HomeCare Hands, one of the fastest-growing homecare agencies in Western Mass.

Initially trained as a nurse, Holloman was looking to make a career change and began to work privately for several families in an elder-care role.

“I managed all aspects of the senior’s care from mental, physical, financial, everything that had an impact on the individual,” Holloman said. “I did that for several years, then decided to try my hand at business.”

In 2013, she stayed up many nights with her laptop computer studying how to start a home-care agency, how to understand the needs of the community, and what it means to be a woman in business.

After several months, she took out a “tiny ad” in the Reminder offering in-home care for seniors, listing her cell phone as the contact.

“That first call had me jumping for joy,” she said. Her elation was quickly replaced with concern when she heard the specific demands of the assignment. Located in Southington, Conn., this family needed a live-in caregiver for three months for their loved one. The family specified they wanted a mature person, which they defined as 45 to 55 years old, and this person must speak Italian.

“That was our first call,” Holloman said. While uncertain she could find someone to meet all those criteria, she made it work, and the three-month assignment lasted a year.

“We know this is more than a business — these are lives we’re responsible for. We come to work to take care of folks and to make sure caregivers and clients alike are getting what they need.”

“This was our first client, first caregiver, first anything,” she said. “Since then, we’ve built on that success and haven’t stopped.”

These days, HomeCare Hands boasts more than 200 caregivers and employees. Headquartered in Springfield, the agency has offices in Northampton, Greenfield, Boston, and Hartford, with coverage extending to communities surrounding those locations.

While providing caregivers for the home remains its core business, HomeCare Hands has also branched out as a staffing agency for hospitals, assisted-living communities, and other medical facilities.

The arrival of the pandemic aggravated an already-challenging situation with healthcare staffing.

“We saw the needs during the worst of the pandemic and asked how we could help,” said Angie Thornton, marketing coordinator for HomeCare Hands. “The answer was to do something about the lack of staff in all these facilities.”

Achieving this level of growth, diversity, and reputation within a highly competitive market has not come easily. Overall, Holloman attributes the company’s success to going the extra mile when it comes to helping the caregivers they hire — quite literally, as we’ll see — and finding creating ways to meet client needs.

“We know this is more than a business — these are lives we’re responsible for,” she said. “We come to work to take care of folks and to make sure caregivers and clients alike are getting what they need.”

 

At Home with the Idea

It was not so long ago that Holloman developed a formal business plan for HomeCare Hands and faced constant rejection from banks and other avenues of funding.

“As a result, we have no government contracts, and we have no debt,” she said. “We have no back-up plan, and we run on grit.”

It was with this grit and that aforementioned passion for working with seniors that Holloman started her business from a small office on Main Street in Springfield in 2015. After a number of years, as the business grew, she moved to new quarters on State Street. In October, HomeCare Hands took over a larger space that she knows is already too small for their future plans.

The office staff at HomeCare Hands, which has branched out beyond home care and become a staffing agency for hospitals and other facilities as well.

The office staff at HomeCare Hands

The office staff at HomeCare Hands, which has branched out beyond home care and become a staffing agency for hospitals and other facilities as well.

“We’re now looking for our own building,” she said. “We need the extra space because we continue to grow and we are hoping to open a CNA training school in 2022.”

How HomeCare Hands has grown so quickly and profoundly is an intriguing business story, one about a company adapting to meet merging needs and diversifying to find new ways to not only generate revenue, but serve seniors and area healthcare providers.

And in many ways, the company has the right services at the right time.

Indeed, demand for in-home senior services has seen huge growth simply because of demographics. U.S. Census figures show nearly 10,000 Americans turning 65 every day, a trend expected to continue until 2030.

On top of that growth, Holloman said more people are looking for home-care services since the pandemic. Meanwhile, concern for personal safety has reduced the number of available healthcare workers, as many will no longer work in medical facilities or in people’s homes.

All this has made the pandemic a time of both opportunity and challenge.

At the height of the pandemic, clients and families were cancelling in-home services, and caregivers were as hard to find as many of the supplies needed to keep them safe. Holloman worried about her agency’s survival.

“When we didn’t have enough coverage, our whole management team got into scrubs and went to see clients,” she said. “We also made our own hand sanitizer and other supplies when they were hard to get.”

As they worked through the many challenges of the pandemic, HomeCare Hands gradually placed caregivers, as well as certified nursing assistants and home health aides, for their clients. Recruitment is an ongoing process because the need for staffing never stops.

“We have become the go-to agency for those who are not able to find professionals to meet their needs,” Thornton said, adding that the phone keeps ringing because of solid word-of-mouth referrals.

One key to the company’s success is its willingness to work with caregivers to help them succeed in their jobs with matters such as transportation.

“When necessary, we will pick up our caregivers for their shift and bring them back home. If they are willing to work, we will make sure to support them.”

Agencies commonly require in-home workers to have a dependable vehicle as a job requirement. That’s not an unreasonable demand because clients live in many different areas, most of which are not on a bus line.

Nicole Grimes, chief operating officer for HomeCare Hands, heard about caregivers who were willing to work but had no means to get to people’s homes. This challenge led to the company creating what she called a transportation division.

“When necessary, we will pick up our caregivers for their shift and bring them back home. If they are willing to work, we will make sure to support them,” she explained, adding that, while she will drive caregivers herself in a pinch, this service is offered only until the caregiver can get back on their feet and afford their own car.

Meanwhile, in-home work often requires someone to cover limited hours for only a few days a week. That can be difficult for caregivers seeking a full-time paycheck. Grimes works with caregivers to schedule multiple shifts for those who want more hours. It’s all part of helping people succeed and become independent.

“Caregivers know they can come to us, even for personal matters such as finding an apartment or help with arranging childcare,” she said.

Making that extra effort is all part of the culture Holloman wants to build.

“We take time to get to know each caregiver who joins us,” she told BusinessWest. “When people come here, we want them to stay and be part of the team.”

To help clients and caregivers feel safe, Thornton said vaccinations are a must.

“Anyone new who joins us must be vaccinated,” she noted. “At this point, none of our clients wants someone in their home unless they are vaccinated.”

Because the need for services can often occur outside of business hours, Holloman and her team rotate who is on call to provide 24/7 coverage.

“It could be a Saturday afternoon and someone calls us because they just visited their mom or dad and realize they need services, but don’t know what to do,” she said. “We are there so they don’t have to wait until Monday to get answers to their questions.”

 

Bottom Line

On Jan. 1, HomeCare Hands will celebrate its seventh anniversary. Holloman reflected on the challenging, scary, and ultimately satisfying journey so far. “In 2015, I was asking, ‘how am I going to do this?’ and now, as we approach 2022, I’m asking, ‘OK, what are we doing next?’”

Needless to say, she will answer that question with creativity, enthusiasm, and, yes, a healthy amount of grit.

Community Spotlight

Community Spotlight

By Mark Morris

Lyn Simmons says the town’s former adult center may become the future home of municipal offices.

Lyn Simmons says the town’s former adult center may become the future home of municipal offices.

While two major construction projects reached completion in 2021, it’s no time to slow down for Longmeadow officials, who are planning several more projects for 2022 and beyond.

In June, Department of Public Works staff moved into their new $24 million facility on Dwight Road. Town Manager Lyn Simmons said the new location provides a cleaner, safer work environment with amenities that save money for the town over time.

“The DPW now has vehicle wash bays to clean dirt and salt off their equipment as well as lifts that are appropriate for the vehicles we have,” Simmons said. “We also have covered storage for everything, which, in New England, is critical for maintaining all this expensive equipment.”

Marybeth Bergeron, who chairs the Permanent Town Building Committee, said the DPW facility has come a long way from its old location on Pondside Road. After operating out of a couple buildings constructed in the early 1930s that she described as “incredibly poor condition,” the new location improves efficiency and morale.

“Our new DPW director, Geoff McAlmond, is working to unify all the entities in Public Works, and it’s much easier to do that with all the staff and department heads in one place,” Bergeron said.

Simmons said the new facility will have a positive impact on town business beyond the DPW. “Police, fire, and other departments that have town vehicles now have a fueling facility they can use as well.”

“People who never set foot in the old center are coming to the new one because it is, quite frankly, gorgeous, and it offers people what they want.”

In early November, Simmons cut the ribbon for the new Longmeadow Adult Community Center on Maple Road. The $14 million building features plenty of space for seniors looking to take part in exercise, activities, or one of the many other programs available.

Bergeron pointed out that older residents use fewer town resources, such as the school system and even trash pickup, because their households are smaller. At the same time, their numbers are growing as more people retire every day, and they are looking to stay active and social. For all those reasons, she said many communities are investing in their elders.

“People who never set foot in the old center are coming to the new one because it is, quite frankly, gorgeous, and it offers people what they want,” she added.

Thanks to a $250,000 donation from S. Prestley Blake toward the end of his life, the center has something few such facilities have: a dedicated gymnasium at one end of the building, featuring a full court that can be used for basketball or volleyball and an elevated walking track around the perimeter. On the day BusinessWest toured, three pickleball courts were set up, with games in progress.

The new facility is located less than 100 yards away from the old adult center, which was a former elementary school at Greenwood Park. In the immediate short term, the commercial kitchen in the old center will be used by staff from Armata’s Market to prepare holiday meals for their customers after a fire in November destroyed the market, a longtime fixture in Longmeadow (see story on page 15).

Looking ahead, the former adult center may be the future home for the town municipal offices. Currently, municipal staff are located in Town Hall and the adjacent Community Hall. Town Hall offers limited space, and Simmons said bringing it into compliance with current standards under the Americans with Disabilities Act (ADA) would be cost-prohibitive. A recent feasibility study looked at reusing the Greenwood site as combined office space for the town.

“We would move municipal employees from Town Hall and Community Hall to one location and consolidate under one roof,” Simmons said. If the plan is approved, Simmons said the town can pay for renovations to the Greenwood site out of the $4.6 million allocated to Longmeadow under the American Rescue Plan Act (ARPA).

Before the town can consider re-using the former DPW site, Simmons said the first goal is to demolish the old buildings which are deemed unsafe.

“We’ve done a feasibility study to see if ground mounted solar panels would make sense for us financially,” she said. “It looks like that would be a good use, but we have a ton of work to do before it can go out to bid.” Right now, it looks like the town will tackle this project in the spring or summer of 2022.

 

Doing Their Homework

Though mask measures are still in place and students are still adjusting to daily in-person learning, Longmeadow Schools Superintendent Martin O’Shea said having students back in class full-time makes it feel more like a typical school year.

In addition to what he termed as “the ebbs and flows of the school day,” he also recognizes the town is at a crossroads when it comes to deciding the future of its two middle schools.

Glenbrook Middle School, built in 1967, and Williams Middle School, built in 1959, are two well-maintained buildings, neither of which has had any significant renovation work since they were completed. Despite all the care and maintenance, time has a way of catching up with many of core systems, and the HVAC, plumbing, and electrical infrastructure in both buildings have reached the end of their useful life. A study by Colliers Project Leaders identified more than $30 million of essential maintenance and repair issues at the two schools.

O’Shea said the Longmeadow School Committee has petitioned the Massachusetts School Building Authority (MSBA) to help answer the question: should Longmeadow repair the two schools or bring all the middle-school students into one new building?

“If we commit to the repairs Colliers identified, we would make critical improvements to the two schools, but we’re left with the old footprint and the old design,” he explained. “We still wouldn’t have the types of learning spaces we think would be best for students for the next 50 years.”

Longmeadow at a glance

Year Incorporated: 1783
Population: 15,853
Area: 9.7 square miles
County: Hampden
Residential Tax Rate: $24.74
Commercial Tax Rate: $24.74
Median Household Income: $109,586
Median Family Income: $115,578
Type of Government: Open Town Meeting; Town Manager; Board of Selectmen
Largest Employers: Bay Path University; JGS Lifecare; Glenmeadow
* Latest information available

Working with the MSBA can be a six- or seven-year process. That’s why O’Shea believes Longmeadow is at a crossroads right now. He and others in town support building new rather than investing in the old.

“Our sense is that it would be more cost-effective and more educationally effective to build a new school,” he said, adding that modern schools are built to be fully accessible, with rich digital-learning spaces, as well as spaces for small-group support and intervention.

O’Shea recognizes many residents value having two neighborhood-based middle schools in town, but both need extensive repairs and modernization to continue to serve today’s students. One new middle school can easily accommodate the 648 students currently attending Glenbrook and Williams.

“If we combined our two middle schools under one roof, we could potentially create educational economies of scale, and the new building would reflect a more typically sized middle school,” he said. “The average middle school in Massachusetts accommodates right around 600 students.”

Unlike many communities, Longmeadow does not experience significant school-enrollment swings, but instead stays fairly steady over many years. O’Shea said that’s an important consideration when going through the MSBA process.

“The whole building project begins when MSBA engages the community in demographic studies to better understand enrollment and population trends,” he noted. “That way, they can make sure the school that is eventually built is positioned for future enrollment.”

The middle-school project represents another chapter in Longmeadow’s continued commitment to academic excellence. O’Shea said education is an important part of the town’s economic engine.

“Longmeadow places a premium on education,” he told BusinessWest. “It’s the reason people move here and why it’s a great place to raise a family.”

 

Great Outdoors

Longmeadow also prides itself on its many recreation areas. Simmons is looking to bring in a consultant to assess all swimming pools, basketball courts, playgrounds, and other sites to assess their condition. Once the town has a baseline on the needs for each area, Simmons’ goal is to have a community conversation with town departments and committees as well as with residents to identify the most pressing projects.

“We want a roadmap so we can get strategic on how we eventually fund that work and complete those projects,” she said.

With these projects and others on the horizon for Longmeadow, Bergeron acknowledged she and the Building Committee will have plenty of work ahead. “I’m looking forward to the next five to 10 years as we get some of these projects off the ground and up and running.”

Features

Picking Up the Pieces

The aftermath of the Nov. 23 fire

The aftermath of the Nov. 23 fire that ravaged the Maple Center shopping plaza.

Alexis Vallides has some experience bouncing back from disaster.

Actually, it was her bother who had that experience. His business, Latino Food Distribution, was one of many in West Springfield that were leveled by the tornado that tore through many area communities in 2011.

Vallides has been leaning hard on her brother, and certainly gaining inspiration from his comeback, as she embarks on one of her own.

Indeed, Vallides is one of many business owners who were left homeless by the massive fire just before Thanksgiving that engulfed the plaza in Longmeadow that unofficially took of the name of her business, Armata’s Market.

She was called early in the morning on Nov. 23 to let her know about a fire in the neighboring liquor store. Less than a few hours later, her store was almost completely leveled.

Like others impacted by the blaze, she is starting to write the next chapter in her business story, and, while there are many emotions attached to this rebuilding process, she is, well, very businesslike about it.

“As a business owner, things happen; we take a lot of risks,” she said. “Every day, we’re susceptible to catastrophes and disasters like that; you have to cope and move on.”

That’s what her team did the morning of the fire — she recalls employees standing and watching the fire, and also conceiving ways to prepare and distribute prepared meals for customers.

Armata’s was one of five businesses impacted by the fire at the Maple Center shopping plaza, which left 74 people unemployed initially. The others are the Bottle Shop liquor store, Iron Chef Asian Cuisine, Longmeadow Salon, and Dream Nail and Salon. Most, if not all, have expressed a desire to reopen — in Longmeadow if they can, said Lyn Simmons, town manager, noting, as others did, that there isn’t a large inventory of retail space, and especially vacant space, in this mostly residential community.

One business, the salon, has already reopened in East Longmeadow, she said, adding that, as these business owners grapple with the many challenges facing them, the town, the state, and several area business and economic-development-focused agencies are bringing resources to bear aiding in the recovery process, and connecting impacted business owners with grants, loans, and whatever else is needed to start anew.

Grace Barone, who leads one of those agencies, the East of the River Five Town Chamber of Commerce, knows firsthand what it’s like to claw back after a fire has destroyed a business and left dreams in a state of perilous limbo. Indeed, she owned Bridal Reflections, one of 20 ventures left homeless by a massive blaze in a retail plaza in Palmer.

She told BusinessWest that, in the wake of such a disaster, business owners go through a wide range of emotions, from the initial shock to what amounts to grief concerning their loss, to the frustration that comes from dealing with insurance companies and the myriad other issues related to getting back on one’s feet.

“As a business owner, things happen; we take a lot of risks. Every day, we’re susceptible to catastrophes and disasters like that; you have to cope and move on.”

“This is a challenging time, and it can be so overwhelming,” she said, adding that, in such a situation, the best her agency and others can do is stand by those impacted by it and provide whatever support they can.

“You go through the shock of ‘oh my gosh, everything I’ve worked for is gone; what do I do next?’” she said. “You try to formulate a plan and determine whether you’re going to rebuild and where you will conduct business in the meantime. And you go forward from there. But every time you think you’ve taken a few steps forward, there’s always something that pops up, and then you have a setback. We want to make sure we’re there for our members when those times come.”

As for Vallides, she is moving forward with plans to find both a temporary location and, if the Maple Center owners rebuild, as she expects they will, return to Shaker Road in the future.

“I’m checking out places in Longmeadow and Enfield for a temporary location, but, unfortunately, Longmeadow doesn’t seem to have anything quite big enough for our needs,” she said, noting that the operation requires roughly 5,000 square feet. “There are a few potential landing spots in February, and maybe by February we can get something up and running.

“We’re in it for the long run, and if we can set up something temporarily, close to our customers, we’ll do that,” she went on. “But, ultimately, we want to be back on Shaker Road.”

As for what she learned from her brother’s experience and is using to help her in her comeback efforts, she said there were many lessons from that story.

“It’s important to be strong and hang in there, not just for myself, but my employees as well,” she said. “Everyone counts here.”

And with that, she spoke for everyone impacted by that fateful fire.

 

—George O’Brien

Features

Thinking About Better.com

By John Gannon

 

A few weeks ago, about 900 employees working at Better.com were asked to simultaneously attend a virtual Zoom meeting. They were probably expecting information about updated company policies or perhaps some sort of holiday bonus. Instead, Better.com CEO Vishal Garg notified all attendees during the three-minute video call that their employment was terminated “effective immediately.”

Apparently, Better.com, which is a popular online mortgage-lending service, claimed that hundreds of the employees who were let go had been “stealing” from the company by working remotely only a few hours a day. After videos of the termination meeting surfaced on social media, Garg faced significant criticism for his seemingly crass and heartless actions during the holiday season. He subsequently apologized, saying he “failed to show the appropriate amount of respect and appreciation for the individuals who were affected and for their contributions to Better.” He then took a leave of absence from work.

John S. Gannon

John S. Gannon

“The bigger issue here seems to be that Better.com was not doing an effective job monitoring and motivating their remote workforce. This can certainly be a challenge when employees are home in their pajamas instead of in the office.”

There is a lot to unpack here from an employment-law perspective. For starters, was there anything unlawful about Better.com’s actions? Coldness aside, the answer is no, assuming none of the more than 900 employees were let go for discriminatory reasons, such as age, race, or taking medical leave (just to name a few). However, given the media spotlight on Better.com right now, I would not be surprised if at least a few of those fired employees brought lawsuits contending they were let go for unlawful reasons.

Let’s move on to the suspected stealing — can you fire employees who steal from you? That’s an easy one. Of course you can. But were these folks stealing by working less than an expected eight-hour day while at home? I don’t think they were. Employees often fail to work their expected hours in a day, week, or month, while being paid their full salaries at the same time. This is not stealing. Instead, it sounds more like a performance and time-management problem that should be addressed by managers and supervisors. If there is a significant gap between expected and actual hours worked, this could be a problem that warrants discipline or even termination from employment if particularly severe. But it should not be labeled or viewed as company theft.

The bigger issue here seems to be that Better.com was not doing an effective job monitoring and motivating their remote workforce. This can certainly be a challenge when employees are home in their pajamas instead of in the office. I have talked to executives who feel strongly that people simply are not going to get as much done at home because the temptation to slack off is too great. That may be so, but there are tools that businesses can implement to track and monitor employee work habits and productivity while at home.

For starters, daily Zoom meetings, or at least a few video calls per week, put people in the mindset of being at work while giving colleagues a chance to see and interact with their peers, even if it is through a video screen. Second, if a business has real concerns about employees slacking off at home, there are all sorts of employee-monitoring software products out there that do everything from tracking keystrokes to measuring time away from the computer. Just be sure these tracking tools do not run afoul of workplace privacy laws.

In order to satisfy these laws, you generally have to disclose to the employee that they are being tracked and/or monitored, which undoubtedly will cause concern to some of your workforce who feel ‘Big Brother’ is looking over their shoulder.

“The final and most important lesson brought to us courtesy of Better.com was how not to communicate a 900-person layoff to your workforce.”

The final and most important lesson brought to us courtesy of Better.com was how not to communicate a 900-person layoff to your workforce. Losing your job over a three-minute video chat alongside 900 peers is just awful. Many of those employees undoubtedly provided numerous years of service to Better.com. They were rewarded with no chance to ask questions about the layoff decision, no chance to talk about other opportunities within the organization, and apparently no offer of severance to get them through the holidays. Garg faced severe criticism in the media for his callous approach to firing 900 people at once — and deservedly so.

But is there an easy way to tell people they are getting laid off? No, there is not. But there is a right way and a wrong way. The wrong way was illustrated by Garg — cold and impersonal, and showing no signs that you care in any way about the employees’ future endeavors.

Based on my experience, the right way to conduct a layoff involves three things. First, employers need a polished communication strategy that involves one-on-one meetings with affected employees that gives them an opportunity to have some real dialogue about the decision-making process and suggestions for future success with another company.

Second, consider offering outplacement services to all employees who are part of a reduction in force. Outplacement services are coaching and mentoring programs that help separated employees find a new position. These services are typically affordable and demonstrate that the business cares about its workforce.

Finally, providing some severance to affected employees is always recommended. This may not be an option if the reason for the layoff is driven by financial considerations, which is often the case. Even so, severance should absolutely be part of the conversation when thinking through a layoff, and, in my opinion, should be offered as a gesture of goodwill unless the bottom line just will not allow for it.

 

John Gannon is a partner with Springfield-based Skoler, Abbott & Presser, specializing in employment law and regularly counseling employers on compliance with state and federal laws, including the Americans with Disabilities Act, the Fair Labor Standards Act, and the Occupational Safety and Health Act; (413) 737-4753.

Banking and Financial Services

Some Moves of Interest

 

For a bank that’s been around for 136 years, PeoplesBank came across commercial lending fairly recently.

“My predecessor, Doug Bowen, started commercial lending at PeoplesBank probably 35 years ago,” Tom Senecal, the bank’s president and CEO, told BusinessWest. “We didn’t do any commercial loans until then, and we started out with just commercial real estate. And we stayed conservative with real estate, and never went into the C&I side because we didn’t have a lot of expertise. Just by virtue of what our comfort zone was, we focused on the real-estate side.”

That’s all changed, as PeoplesBank has made a strong push into the realm of C&I (commercial and industrial) business lending over the past two years.

“A little over two years ago, we started talking about our strengths and weaknesses and who we are are and what we do as the largest mutual institution in Western Mass.,” Senecal explained. “We have a very successful commercial real-estate portfolio. What we didn’t have was the C&I side. So we started talking about how to get into the C&I business.”

The reason the bank hadn’t done so sooner came down to expertise, which it had in spades on the real-estate side but much less so in C&I, where “you’re financing equipment, you’re financing lines of credit, there’s different types of collateral, it requires more monitoring, more analysis … we didn’t have that experience,” Senecal said. “It’s a very complex and very different lending skillset than commercial real estate.”

That’s why Senecal started talking with Frank Crinella, who has decades of experience in lending in the region, about bringing over a group of individuals from a large regional bank to spearhead a push into C&I lending.

“We have a very successful commercial real-estate portfolio. What we didn’t have was the C&I side. So we started talking about how to get into the C&I business.”

“We talked for several months about his group of people coming over, and we brought over five people that have an enormous amount of experience on the C&I side,” Senecal said. “Real estate is much more transactional, and we wanted to develop relationships in our home market much better than we ever had in the past, and C&I, to us, was the way to do it.”

Crinella is now the bank’s senior vice president and senior lender, and will also take the title of senior credit officer when Mike Oleksak, the institution’s longtime senior lender and senior credit officer, retires at the end of the year.

“C&I typically brings over the relationship more than just the real-estate transaction. And now that we have the group of people that we have, I think it’s going to be tremendously successful, not just for the Western Mass. market, but for our growth strategy going down into Connecticut as well,” Senecal said. “Frank and the group of people who came over have been here just over a year and have been enormously successful in that period of time, starting to build relationships here in Western Mass.”

Crinella saw great potential in what PeoplesBank was trying to do.

“What attracted us to Peoples was really the culture,” he said. “And C&I is all about relationship lending, the team approach. We have a very strong credit culture, but we also have a lot of depth on the cash-management side, and our branch network is very strong and plays well to the companies here in Western Mass. and Northern Connecticut.”

The commercial-lending department is now up to 50 people, Crinella noted. “The team complements each other so well. They brought in a lot of credit analysts that have C&I experience, so we’ve got depth now on the underwriting side.”

He was also drawn to a lending model at Peoples that prioritizes the ability of lenders to make quick decisions (more on that later).

“We talk about speed to market around here — we make all our decisions here on Whitney Avenue, so we can turn around a loan request quickly, and kind of outmuscle the big boys in that way … and, with the depth that we brought, outmuscle the local competition as well.”

 

Lending Support

Senecal said he knew PeoplesBank could excel at C&I lending based on its culture and ability to forge relationships through its branches.

“C&I is small business,” he explained. “And the interconnectivity between our branch network and our C&I lending is extremely important. It’s very difficult to develop a relationship on the small-business side without a branch network. So, in a lot of my conversations with Frank, we’re focused on our growth strategy and continuing to have the brick-and-mortar strategy, which complements the C&I side.”

Retail banking, Senecal noted, is moving in the direction of digital modes like mobile banking, online bill pay, and ITMs.

“When you talk C&I lending and small-business lending, you can’t do all that digitally online. You need a relationship. Accounts are very different for small businesses than they are on the retail side, between needing cash-management services, wires, positive pay … there are a lot of different functionalities small businesses utilize, more than the typical retail customer. A lot of services need to be communicated, and you can’t do that necessarily digitally. So the branch network has a huge impact.”

Crinella called it “delivering the bank.”

To explain that concept, he noted that, “when a relationship lender goes out to visit a customer, oftentimes they’ll bring the banking-center manager as well as the cash-management professionals, so the customer gets the entire bank when they’re meeting with the relationship lender. That’s really the difference between C&I and commercial real-estate lending. That’s what we’re trying to capture when we talk about relationship lending.”

The relationships customers already had with the lenders who moved to Peoples have generated some business as well, Senecal said.

“When you transition a group of five people from one institution to another, you create some loyalty from those customers who had relationships with them, and you can tell that the relationship means a lot. We’re getting great, positive feedback as a result of that.”

Crinella agreed. “They become valued advisors to the customer,” he said. “They take the time to understand their business and make informed decisions. Again, I think speed to market has been a huge competitive advantage. We get there quick. We can get a term sheet out in 48 hours, and that’s something, competitively, the big boys have a tough time competing with.”

With Oleksak, and soon with Crinella, it was important that both titles — senior lender and senior credit officer — fall under the same individual, Senecal said.

“From a customer’s perspective, when Frank shows up at the table, he has the decision-making authority for quite a few loans. Certainly, when loans get larger, we have a committee, we meet and talk, but Frank has the ability to sit at the table and make decisions immediately with customers based on what he sees.

“That doesn’t occur at most larger institutions,” Senecal went on, “where the lender goes out and gets the loan, develops the conversation, and then goes back with all the information and says, ‘OK, this is the deal. This is the terms of the deal I’d like to do.’ And they sit around with other people — adjudicators, other credit people, who say, ‘yeah, I don’t like that deal. You need to do this, you need to get that.’ And it becomes a group decision.”

That’s not the best or most efficient experience for the customer, he said.

“When you sit in front of a customer and you make the customer believe we’re going to do the deal, then you go back to the office and all of a sudden five different people have their opinions on what it should look like, it’s really hard to go back to the customer and say, ‘yeah, the deal’s changed.’”

That’s why it’s important to empower people, not committees, to make decisions, Senecal explained. “If the loan is a large loan, yes, it goes up to committee discussion. But in my 25-plus years at the bank, maybe two loans didn’t get through loan committee — because the lenders know what they’re doing.”

 

By All Accounts

When commercial lenders at PeoplesBank were focusing solely on real estate, they excelled at deals for warehouses, multi-family facilities, mixed-use properties, and strip malls. With C&I, they’re talking to manufacturers, healthcare practices, nonprofits, lawyers, accounting firms, and many more entities. And that requires specialized knowledge and, yes, strong relationships.

“You’re not lending on the building, you’re lending on the business,” Senecal said. “In real estate, we lend the money and hope to get paid back. If we don’t, we have the real estate. On the business side, it’s a whole different aspect of trying to understand, ‘how are you going to pay the loan back?’ When you get into all these other industries, it takes a unique skillset to identify whether or not it’s viable and the loan is a good loan or not.”

It’s a skillset the bank plans to further grow as it evolves its lending presence in the region’s C&I landscape.

 

Joseph Bednar can be reached at [email protected]

Banking and Financial Services

‘A True Win-Win’

By Mark Morris

Jim Kelly

Jim Kelly says PNCU and Premier Source offer services and expertise that benefit each other.

Polish National Credit Union started in 1921 with an investment of $325 and has grown to more than $700 million in assets today. But there are always ways to improve and expand its services, said President and CEO Jim Kelly, who describes PNCU’s recently announced merger agreement with Premier Source Credit Union as a joining of two forces.

“No one at Premier Source will be losing their job,” he said. “In fact we are counting on their expertise on offering credits cards to members which is a business we’re not in right now.”

Meanwhile, confronted with rising costs to keep up with technology, compliance, and talent retention, Premier Source had begun looking into a merger as its best way forward. CEO Bonnie Raymond said that, after considering a number of factors, Polish National emerged as the best fit.

“As a larger organization, Polish National offers in-house mortgages and commercial lending, while we bring our credit-card portfolio to expand to their membership,” Raymond said. “Along with the credit-card business, they will benefit from the expertise of our staff, so it’s a true win-win.”

Kelly added that organic growth in Western Mass. is not easy. That’s why he called the merger with Premier Source a “once-in-a-lifetime opportunity.” The current Premier Source headquarters on North Main Street in East Longmeadow will become the ninth branch for Polish National, which is headquartered in Chicopee. That location also addresses one of Kelly’s strategic goals in finding additional space.

“We’re a growing credit union, and there’s not much room left at our headquarters in Chicopee or at our operations center in Wilbraham,” he said. “The Premier Source building is large and beautiful, so it helps us in a huge way.”

What has become known across the U.S. as the Great Resignation has also affected the two credit unions. Between retirements and just leaving the job due to COVID-19 concerns, both organizations felt the impact of people leaving. Raymond noted that the merger will help address staffing issues for both.

“This was another win-win because our staff will stay employed while Polish National will be able to bring on experienced help to fill any openings they might have.”

“This was another win-win because our staff will stay employed while Polish National will be able to bring on experienced help to fill any openings they might have,” she explained.

In recent years, both organizations have grown through mergers with smaller credit unions. On a national level, Kelly told BusinessWest, approximately one credit union per day is involved in a merger.

 

Strategic Partnership

Premier Source began in 1941 as Kelko Credit Union, founded by employees of the Kellogg Envelope Company. Over the years, Premier Source acquired employee credit unions from companies such as Spalding, Hasbro Games, and Western Mass Electric. While membership now exceeds 4,500, Raymond said its growth still doesn’t provide the economies of scale of larger institutions.

“For example, interactive teller machines have become popular, but they are extremely pricey, and just buying one doesn’t recoup the investment,” she said. At $80,000 each, an institution needs to own several ITMs to find any economies of scale.

By agreeing to the merger, Premier Source will not be investing in ITMs, but its members will see a direct benefit. A common practice when a credit union merges involves paying a dividend to its members. Raymond explained that members are the reason Premier Source has a strong capital foundation, so the board will soon vote for a special dividend to compensate members for staying with the credit union.

“It’s a way to reward members for their longevity. Members who have been with us for more than 10 years will receive the largest dividend,” she said, adding that most members have belonged to Premier Source for more than 10 years.

Far from a cold and calculated business deal, Kelly said a credit-union merger is typically a more personal type of transaction, done only with people who have earned one’s trust.

“You don’t merge with someone you’ve only met a few months ago,” he noted. “It usually involves people you’ve known for at least several years because you want to make sure your members and employees are taken care of as a result of the merger.”

Kelly said he and Raymond go way back, having crossed paths many times because they work in the same industry. “I’ve known Bonnie for a long time. She is a high-quality and talented person.”

The next step in the merger process involves regulatory approval from the Massachusetts Division of Banks, the National Credit Union Administration, and the Massachusetts Credit Union Share Insurance Corp., as well as approval from the memberships of both credit unions.

A recent news release suggested the merger could be completed by the spring of 2022. Kelly, a former regulator, said he would not offer a timetable because it’s completely in the hands of the regulators as to when they complete their work on the merger.

 

Healthy Outlook

Polish National ranks 174th among the top 200 healthiest credit unions in the country, according to the Cooperative Credit Union Assoc. Kelly is proud of this accomplishment and noted that it’s positive news considering there are 5,164 credit unions in the U.S.

For now, the numbers Kelly looks forward to involve the 4,500 Premier Source members joining the 25,000-plus members of Polish National. It’s a fitting way to start the next 100 years of the credit union,” he said.

“While our founders were Polish, we have always been a community credit union and will continue that tradition,” he added, noting that the quote credited to the revered TV22 meteorologist John Quill still rings true: “you don’t have to be Polish to be a member.”

Banking and Financial Services

Contractor or Employee?

By Sarah Rose Stack

 

Even prior to the pandemic, the ‘gig economy’ was growing at unprecedented rates. That growth has only been accelerated with more traditional companies relying on remote workers and hiring more contractor workers. Freelancing is big business, with nearly $1 trillion of income generated. However, although that total number is impressive, independent contractors earn 58% less than full-time employees (FTEs), and more than half don’t have any employer-provided benefits.

From a business perspective, there are advantages and disadvantages to how a company classifies its workers. With employees, you’ll have more control, but that comes with more compliance obligations. With contractors, you’ll have fewer compliance obligations, but you will also have less control.

“From a business perspective, there are advantages and disadvantages to how a company classifies its workers.”

Some tax advantages to hiring independent contractors include the ability to avoid several tax obligations that apply to employees. For example, a company generally isn’t required to withhold federal or state income taxes, pay the employer’s share of Social Security and Medicare (FICA) taxes, withhold the workers’ share of FICA taxes, or pay federal or state unemployment taxes.

In addition, companies that use contractors may avoid other obligations, such as the requirement to pay minimum wages and overtime under the federal Fair Labor Standards Act and similar state laws, furnish workers’-compensation insurance (in many states), make state disability-insurance contributions, or provide employee benefits.

Keep in mind that simply having a written agreement or labeling a worker as an independent contractor doesn’t make them so. The IRS and other government agencies look at all the facts and circumstances to determine whether workers are misclassified.

When someone is hired, they must be classified as either an employee or an independent contractor. Here’s how the IRS determines worker status.

 

Behavioral Control

If the company has a great deal of control over the behavior of the worker — for example, where they work, when they work, or how they perform their jobs — the worker should be classified as an employee. If the company is giving the worker evaluations, conducting extensive or ongoing training about procedures and methods, or demanding that the worker attend daily meetings or set hours, then the worker is more likely an employee. Independent contractors will customarily set their own hours, decide on how to implement a project, and dictate where they work.

 

Financial Control

If a company provides equipment for the worker (tools, software, computers, phone, etc.), often reimburses expenses, and/or pays on regular and ongoing basis, then the worker is more likely to be an employee. The IRS clarifies by considering the following:

• Significant investment in the equipment the worker uses in working for someone else;

• Unreimbursed expenses, which independent contractors are more likely to incur than employees;

• Opportunity for profit or loss, which is often an indicator of an independent contractor;

• Services available to the market, as independent contractors are generally free to seek out business opportunities; and

• Method of payment. An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time even when supplemented by a commission, while independent contractors are most often paid for the job by a flat fee.

 

Relationship

Perception of the relationship is considered, but the interactions between workers and employees is what ultimately defines the relationship. Written contracts are considered; however, an employer cannot classify their workers as independent contractors when they, in fact, treat them like employees. If the company is providing employee benefits, insurance, paid time off, sick days, or pension plans, then the worker is most likely an employee.

Another area to consider is the permanency of the relationship. Employees are more likely to be hired indefinitely, and either party can terminate the relationship at any time, for any legal reason. Independent contractors’ rights are subject to a contract.

 

Penalties for Misclassifying Workers

The consequences for misclassifying employees as independent contractors can include IRS penalties and other non-tax implications. The IRS may assess back taxes against the company and demand that the company pay the employees’ share of unpaid payroll and income taxes, regardless of whether or not the independent contractors met those tax obligations. Companies can also expect to pay IRS penalties and interest. Further, workers can file a lawsuit against employers to demand back pay, overtime, and benefits.

 

Review Your Current Workers’ Status and Hiring Policies

The potential tax and non-tax savings do not outweigh the significant cost of misclassifying workers. It’s important to review your hiring policies, even if you are comfortable with your classification of current workers, to ensure that you are meeting all applicable standards for classification. Talk with your advisors if you believe you may have misclassified an employee or have questions about the standards.

 

Sarah Rose Stack is the Marketing manager for Holyoke-based accounting firm Meyers Brothers Kalicka, P.C.

Banking and Financial Services

And Why Investors Should Consider Re-evaluating This Strategy

By Jeff Liguori

 

Humans are historically bad at long-term thinking. In the world of finance, that behavior has dramatically worsened over the past 50 years.

Today, the average investor holds an individual stock for less than six months; in the late 1990s, that period was approximately two years. Go back to the 1950s, and investors were holding individual stock for nearly eight years on average.

What has caused such a drastic shift in investor behavior? First, access to markets has never been greater, which creates ample amounts of liquidity for trading. Second, ever-growing reams of information are disseminated at lightning speed, preying on our psyches. Finally, the cost to trade shares of a stock is negligible — in many cases, zero. Each of these trends is quite beneficial to the average investor. However, the combination of these factors promotes behavior that does not support a long-term view of investing.

For the sake of analysis, let’s look at the performance of Target Corp. (symbol: TGT). From July 1, 2013 through Nov. 30, 2021, the total return of Target’s stock (price appreciation and dividends) was 350%. During that same timeframe, the S&P 500 had a total return of 230%. However, shares of Target largely underperformed the broader market in the five years following July 1, 2013, returning 29% vs. 86% for the S&P 500.

Jeff Liguori

Jeff Liguori

“Ever-growing reams of information are disseminated at lightning speed, preying on our psyches.”

There was no lack of bad news in that five-year period, including a change in leadership with a new CEO and a failed plan to expand into Canada that cost the company more than $5 billion. But a patient investor with a long-term view, who believes in owning solid businesses, has been handsomely rewarded by staying with Target.

A recent article in the Wall Street Journal highlighted a little-known mutual fund manager, Wilmot Kidd, who has had exceptional investment performance.

“Over the past 20 years,” it notes, “Mr. Kidd’s Central Securities Corp. … has outperformed Warren Buffett’s Berkshire Hathaway Inc. Over the past 25, 30, 40, and even nearly 50 years under Mr. Kidd, Central Securities has resoundingly beaten the S&P 500. The keys to his success? Patience, concentration, and courage.

“If you had invested $10,000 in Central Securities at the end of March 1974, when Mr. Kidd officially took over,” the article continues, “you would have had nearly $6.4 million by the end of this October, according to the Center for Research in Security Prices. The same amount put into the stocks in the S&P 500 would have grown to $1.9 million.”

Analysis on Kidd’s fund suggests an average holding period north of 10 years. But some of the companies in which Central Securities is invested have been part of the fund for more than 30 years. And during Kidd’s tenure, the fund has underperformed the S&P 500 several times. But having the courage of his convictions, and staying invested through market cycles, has served his clients very well, despite periods of underperformance.

Investing today is about constant measurement. Companies produce quarterly earnings reports, compelling Wall Street analysts to change projections and adjust ratings, which forces investors to rethink their investment ideas. Add in exogenous events to amplify anxieties, and it is no surprise that the investing public has become so shortsighted. No, I don’t worry about the potential ramifications of Russia invading Ukraine on my stock portfolio (an actual assertion from a client!).

As a kid, I remember my grandfather diligently keeping track of the few stocks he owned, writing the end-of-month prices in a journal. He didn’t have the luxury of technology; his analysis was straightforward and pragmatic. He invested in companies with which he was familiar. He had no formal degree, having to forgo college to support his family during the Depression. The son of immigrants, he owned and operated a small grocery store whose customers were almost entirely working-class or even working poor.

One of his suppliers was a company called Corn Products Inc. The company still exists, now called Ingredion (symbol: INGR). For him, investing was about owning a piece of this company that he had a personal connection to, in the hopes of growing a nest egg. Whenever there was ‘extra’ money from his earnings, he would add to his positions. My grandfather retired in 1982 having never earned more than $30,000 in any given year. The value of his portfolio exceeded $600,000 prior to his death in 2011.

He didn’t know he would live for nearly a century, passing at age 97, but he sure invested like it. u

 

Jeff Liguori is the co-founder and chief Investment officer of Napatree Capital, an investment boutique with offices in Longmeadow as well as Providence and Westerly, R.I.; (401) 437-4730.

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