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Gary Thomas

Gary Thomas says a diversified portfolio of investments is always a good idea, with a mix of high growth potential and stable returns.

In an ever-changing world — one in which career trends, technology, and, yes, financial markets have a way of shifting — it can be daunting to craft an investment strategy. Gary Thomas, president of the Wealth Technology Group, relishes the chance to help clients do just that, by focusing on the big picture. His job isn’t just financial planning, he says, but life planning — at least, as much as one can plan for the unexpected turns of life.

It can be daunting, Gary Thomas said, to plan for the future when no one knows what the future will look like.

“As long as there are innovators in this country, there’s going to be change, and that change is going to create disruption. And we’ve seen it already in the jobs that aren’t there that were there 20 years ago,” he said.

That’s not a new trend, of course. “We don’t even know what we want until we see it,” Thomas went on. “Henry Ford once said that, if he’d asked his consumers what they wanted, they would have said ‘faster horses.’ You just don’t know what you want until you get introduced to an idea. You always think things will be the same as they are in this little snapshot of life. You want to hang on to the past, but technology is going to be changing. And we can’t stop that.”

That’s the definition of progress, and that’s good for investment markets, which — despite their short-term fluctuations — have always grown over the long term, said Thomas, president of the Wealth Technology Group. “When the economy grows, everybody benefits sooner or later, but it doesn’t always go in a straight line.”

“Henry Ford once said that, if he’d asked his consumers what they wanted, they would have said ‘faster horses.'”

He shared these thoughts by way of explaining why it’s important for individuals planning for retirement — or just looking to save for college and other expenses — to diversify their investment portfolios. And, indeed, Wealth Technology Group helps clients preserve assets, lower their tax burden, and pass legacies to the next generation through a broad mix of tools, including mutual funds, managed accounts, real-estate investment trusts, energy shares, annuities, and life-insurance options — with the goal of creating financial stability in what can be a volatile world.

That means trusting the long-term record of the stock market, he went on, but also making sure to place money in vehicles with a more predictable return.

“You have to have a philosophy where you basically pay yourself first,” he said. “I almost don’t care where you put it, as long as you put it away. If you’re far enough away from retirement, you should have a pretty diversified approach in equities, but as you get close to retirement, you need to make sure you have some secure money, for when markets go down.”

In other words, investors have to be both educated and flexible — especially at a time when Americans are living longer, meaning they have to make their money last longer.

“We’re in a different situation than our parents or grandparents were. It takes a more creative approach, it takes education, and it takes some hand holding, too,” Thomas said, bringing the conversation back to the role his firm plays. He cited studies suggesting that individuals with a consistent financial advisor tend to do as much as 2% better per year than those that don’t, even accounting for fees.

“Part of it is behavioral science — and having somebody to call,” he explained. “Typically, people make mistakes by moving around too much. You’ve got to have a balanced approach, where you have some secure money and some growth-oriented money for your older years.”

Thomas doesn’t only help his clients navigate this landscape in his Westfield office. He’s been active over the years delivering workshops, seminars, and classroom lectures on financial topics, so he knows the value of educating people.

“In some ways, people are more torn these days, because trying to sort out all that information on the internet is like trying to take a sip through a firehose,” he told BusinessWest. “Everybody’s got an agenda — the posts you see on websites are often promoted content, and it’s hard to distinguish. Even if they’re not, they still represent one person’s philosophy.”

The goal, he added, is for clients to develop their own philosophy.

“Money and financial security mean different things to different people, and it plays a big role in our life whether we want to admit it or not,” he said. “At the same time, there’s just too much information out there — we’re bombarded with it — and there’s a big difference between information and knowledge, or between information and wisdom.”

So, while some investors get wrapped up in “the latest shiny thing,” like Bitcoin or gold, he said, it’s more important to save consistently.

“You can make a lot of money from being average if you don’t switch things around too much, because the market’s averages are pretty darn good,” he said. “But you also have to have that nest egg because when things go down.”

Growing Need

When Thomas launched his business around 1991, financial planning was a field on the cusp of significant evolution.

“Before that, everybody just had a stockbroker, they had an insurance agent, they had an accountant, but there wasn’t much in the financial-planning world. So, basically, we started the company, and it was more estate planning to begin with, but it just sort of evolved over time into money management and financial planning, because that’s where the need was.”

For years, he built the company’s reputation through a number of call-in radio programs around Western Mass., an approach that appealed to listeners hungry for information about financial strategies. “People were looking for straight information and not a sales job. That’s been our philosophy ever since.”

It’s a philosophy that’s also middle-of-the-road when it comes to investment risk, he added.

“If you come from an insurance background, you tend to be very conservative. If you come from a stock background, you tend to be maybe more aggressive. Well, I come from a legal background, and lawyers like to question everything. So it also made me a little skeptical about some of the products. So, basically, we took a more conservative approach to money management — not ultra-conservative, but middle of the road.”

One key message, which has become a company motto of sorts, is “it’s not what you make, it’s what you keep” — which is why he helps clients navigate tax-related pitfalls as well.

“I take more of a holistic approach because of my background; I have a master’s in tax law. And what good is it if you make a ton of money but you have to pay 40% of it back in taxes? So we try to use strategies to avoid that. It’s a total approach of, where are you going to be down the road? If you take money out, is it going to be taxable? Are you going to have some tax-free money?”

While taking a conservative approach, he remains confident in the stock market, but understands that it can be scary to obsess over its fluctuations on a day-to-day basis — and that investors need to rely on other sources for guaranteed returns.

“I take more of a holistic approach because of my background; I have a master’s in tax law. And what good is it if you make a ton of money but you have to pay 40% of it back in taxes? So we try to use strategies to avoid that. It’s a total approach of, where are you going to be down the road? If you take money out, is it going to be taxable? Are you going to have some tax-free money?”

“I’ve been around long enough to see that markets don’t always go up,” he explained, “and when the markets are down, you need a conservative piece someplace to take money from when you need it.”

That said, Thomas added, “this country’s always going to grow. No matter what happens, no matter what financial crisis there is, we’re always looking for new ideas and new ways to grow. And that’s what the market does. You think of the major companies today that are big names, which were not in existence 25 years ago, like Amazon and Google. And Apple was almost out of business.”

He shares these strategies of diversified investment with mainly clients approaching their retirement years, but also many young families that are trying to figure out how they’ll pay for college for their kids, at a time when the average sticker price for four years of education is around $200,000. “It’s a real challenge today,” he noted.

In short, there are many reasons why people walk through his door.

“We do some estate planning, too, but it’s primarily holistic, complete financial planning — helping to find the right portfolio and the right financial tools for each individual, and then we actively manage that,” he explained. “It’s not just about picking an investment. It’s got to be right for you.”

As an independent financial-services firm, the Wealth Technology Group isn’t tied to any single product, and as an accredited investment fiduciary, he’s required to keep the client’s interests at the fore.

“If someone goes into a store, and the owner says, ‘that suit looks good on you,’ maybe it does — but maybe that’s just the suit they want to push that day,” he explained by way of analogy. Fiduciary responsibility simply means the firm considers more than what’s suitable for a client, but what would best meet his or her needs. “It’s not just going to benefit me as a financial advisor, but benefit you as the owner of it.”

Getting the Word Out

Long after his radio talk-show days, Thomas still enjoys conducting seminars and workshops that promote his work in more effective ways than a short radio or TV ad. They’re a means not only to help people understand the compexities of financial planning, but to get the word out that the Wealth Technology Group helps clients from all walks of life, not just high-net-worth individuals, as some firms do.

And when he shares his perspectives, both through seminars and one-on-one, he emphasizes that financial planning is really about life planning — and people are not always emotionally prepared for the changes that retirement will bring.

“Retirement brings a change in lifestyle,” he said. “It’s like you’re going 60 miles an hour, then you retire — and it can be hard to adjust when you don’t have eight hours a day filled up. If your purpose in life was to be a journalist and you were a journalist for 35 years and all of a sudden someone told you you weren’t valued as a journalist anymore, you’d better have a purpose beyond that. So we encourage people to have interests that really excite them beyond work.”

In fact, people don’t expect to be impacted by that lifestyle change, as well as the social withdrawal that sometimes comes with it, as much as they worry about money.

“I’ve had clients in the past that have come in and said, ‘I’m only 200 more Mondays away from retirement,’ and the next time I see them, they say, ‘only 150 more Mondays.’ And I say, ‘you know, what are you going to do the day you walk out the door?’”

Sometimes, the sudden change brings about problems with drinking or eating or their marriage, he went on, noting that some of the first astronauts who went to the moon came back and ran into personal issues once they were past that exciting, challenging phase of their lives.

But you don’t have to go to the moon to feel loss, he went on, and Thomas continues to help people plan for all stages of life — not just financially, but holistically. Because money matters, but it’s not everything.

“There’s got to be something beyond that ‘200 more Mondays.’ So that’s what we encourage people to think about,” he said. “Join a senior center, do something, get involved. And don’t concentrate too much on money. That’s our job.”

Joseph Bednar can be reached at [email protected]

Autos

Cruise Control

As the 2019 models continue to roll into area showrooms, area auto dealers report that sales remain brisk, at something approximating the levels of 2017, which was a very robust year for the industry. Meanwhile, a host of trends have continued or accelerated, including torrid sales of SUVs and trucks, a high volume of used-car transactions, and a heavy emphasis on improving the overall consumer experience.

Jeb Balise held his hand up with his thumb and forefinger barely a half-inch apart.

And then, for emphasis, he brought them even closer together.

“They’re down about that much,” Balise, president of Balise Motor Sales, told BusinessWest, referring to new car sales in 2018 (which still has a few months left, obviously) compared to a year ago.

Essentially, sales are flat, which, as Balise and others told us back at the start of this year, around President’s Day sales time, is a really good thing, because auto sales — an almost always accurate barometer when it comes to the national economy — have been rock solid the past several years.

“They’re just about the same as last year — down a tiny, tiny bit,” said Balise, adding that there is just that much less pent-up demand (resulting from cars, like their owners, living longer lives these days) this year than the past few. But there are still a number of other factors driving steady sales, including a still-booming economy, record-low unemployment, quality vehicles across the board, attractive incentives from the manufacturers, and more.

So sales are still humming, and Carla Cosenzi, president of the Tommy Car Auto Group, believes that at her four dealerships, sales are actually up from a year ago.

“We’re seeing an increase in 2018 over last year, and 2017 was a very good year for us,” she said, echoing Balise’s comments. “It’s not a significant increase, but an increase nonetheless, and 2017 was a really good year.”

Overall, 2018 has been a year when recent trends in the auto market have maintained their speed or even accelerated slightly. These include red hot used-car sales; white-hot SUV and truck sales (especially the former); growing interest in electric and hybrid vehicles, although they still comprise a very small segment of the market; and new levels of convenience for the consumer.

“We’re seeing an increase in 2018 over last year, and 2017 was a very good year for us. It’s not a significant increase, but an increase nonetheless, and 2017 was a really good year.”

Peter Wirth, co-owner of Mercedes-Benz of Springfield, which opened just over a year ago, says he’s seen all or most of the above at his dealership, a facility that has met or exceeded the lofty goals set for its first year of operation.

And that’s especially true in an often-overlooked but quite important segment of this business — the service department.

There are many qualitative measures for this, he said, especially the fact that the dealership recently hired its 12th technician, tripling the number it started with, for the 14-bay facility.

This surge in business in the service department stems from a variety of factors, from how long Mercedes models stay on the road to the fact that the next-closest dealership is in Hartford, said Wirth, adding that demand has risen steadily since the ceremonial grand-opening ribbon was cut — a clear sign that the new dealership has made its presence known.

“The floodgates opened, and in a good way,” he noted. “We’ve been at capacity for the next few days in the service department since the day we opened, and way we’re keeping up is by adding capacity so we can keep it at a reasonable timeframe for customers.”

“It’s been a 100% success story — we’ve never had to send a technician home early; we’ve never run out of work,” he went on. “Not just in the amount of work we’re getting, but also in the team we were able to build.”

For this issue and its focus on auto sales, BusinessWest talked with several area dealers to gauge the local market and the forces, well, driving it. Cars aren’t selling themselves, obviously, but in many respects this industry is on cruise control.

Pedal to the Metal

Those who spoke with BusinessWest said that, these days, the new models arrive at the dealership almost year round, unlike years ago, when all or most would be revealed in the early fall, to considerable fanfare.

Still, many new models do make their debuts as the leaves change colors, and thus this is a good time to take stock — literally and figuratively — of what’s happening at area dealerships and within this all-important sector.

Jeb Balise, seen here at his company’s Kia dealership on Riverdale Street

Jeb Balise, seen here at his company’s Kia dealership on Riverdale Street, says new-car sales are down just slightly from 2017, but still at a very high volume.

First and foremost, said Balise, this remains a buyer’s market in most all respects, even though demand remains high, especially for those trucks and SUVs. That’s because supply is also high as the manufacturers continue to make product and dealers try to move it — usually with good success.

“All of the manufacturers are producing plenty of cars, and demand is off just slightly from a year ago — just enough to put the consumer in the driver’s seat, if you will,” he told BusinessWest. “Incentives have never been better — even for SUVs.

“It’s not because there isn’t demand,” he went on, referring specifically to the SUV segment of the market. “It’s more because all the manufacturers have them now, and they’re trying to grab their piece of the pie.”

The seismic shift (another industry term) to SUVs has been ongoing for quite some time now, but it moved to an even higher gear in 2018.

Indeed, all those we spoke with said sales of SUVs now exceed those of cars (sedans) for almost all models they sell. Overall, Balise said, truck and SUV sales now account for roughly 60% of all vehicles sold and leased.

And this trend toward SUVs extends to some manufacturers renowned for their cars, such as Volkswagen and Volvo, said Cozenzi. Indeed, as she stood in the Volvo dealership recently acquired by the TommyCar Auto Group, she was surrounded by SUVs — small, medium, and large — on the small showroom floor.

They’re all selling, at Volvo and other dealerships, and especially the smaller SUVs, said Cosenzi, adding that they appeal to drivers of all ages for reasons ranging from accessibility (they’re easier to get in and out of, for most people, anyway) to decent gas mileage.

“The smaller SUVs, like the Rogue [Nissan] and the Tiguan [Volkswagen], continue to dominate,” she said. “The Rogue is the number-one-selling vehicle at the Nissan store, and it’s been that way for a few years now.”

Even Mercedes is now selling and leasing more SUVs than cars, said Wirth, adding that the company passed that milestone in 2017, and the arrow continues to move upward.

Still, there are plenty of sedans to be sold, said all those we spoke with, noting that, overall, car makers are turning out quality, easy-to-maintain products across the board, giving consumers plenty of often-hard choices to make, thus motivating the manufacturers to offer solid incentives.

And soon there will be an intriguing new choice, said Wirth, noting the arrival — probably by early next year — of the Mercedes A class, an entry-level luxury vehicle, complete with some different bells and whistles, that should bring that famous nameplate onto more driveways.

“This opens us up to a whole new customer,” he said. “You might have someone attracted to this car not because of the Mercedes-Benz design or the Mercedes-Benz safety or the brand image; it might be just because of the technology in the car. You can say, ‘hey, Mercedes, I’m cold,’ and the temperature will come up, or ‘hey, Mercedes, I’m hungry,’ and it will list the restaurants. And this is in the car that represents the entry point, not the $100,000 model.”

Staging a Coupe

Looking back on his first year of doing business in the Pioneer Valley, Peter Wirth, who previously managed a Mercedes dealership on Long Island, said this past 12 months have certainly been a learning experience.

Among the things he’s learned is that this market is somewhat more conservative than the one he left — a trait that shows up in higher volumes of used-car sales as compared to new-car transactions and more sales than leases — and also generally less aware that Mercedes is now more affordable and therefore more attainable than it has been historically because of the introduction of entry-level models.

Peter Wirth, seen here with members of the service team at Mercedes-Benz of Springfield

Peter Wirth, seen here with members of the service team at Mercedes-Benz of Springfield, says the company has exceeded all the goals it set for its first year of operation — especially in service.

“We still have some work to do on the matter of affordability,” he told BusinessWest, adding that perceptions about the Mercedes brand being beyond one’s reach remain despite more than ample evidence to the contrary. And that goes across the board, for passenger and commercial vehicles alike.

But he’s hoping that area residents will follow the lead of Jeff Bezos, who recently ordered 20,000 Sprinters (a cargo van made by Mercedes) for Amazon.

“I’m sure he did the math before he placed that order — I’m sure he sat down and looked at the life-cycle cost, the reliability, the down time, and everything else. He’s a pretty clever guy, and the fact that they committed to us says something.”

To Wirth, it says people need to look beyond the sticker price on the windshield (and Mercedes is competitive in that regard as well with many models) and look at the other ingredients that go into the equation, such as dependability, maintenance costs, convenience, and the sum of all these parts.

“We’ve been having the conversations regarding affordability, but also about how this is an amazing value proposition,” he noted. “We’re still working on it, but we’ve made great headway.”

Something Wirth didn’t need to learn, because he knew it already, is how important customer service and providing convenience are these days, especially to time-strapped, increasingly demanding customers.

“Time is money,” he said, adding that the dealership works to save customers some of that precious commodity in every way it can, from picking up a car bound for the service department at one’s home to getting them in and out of that service waiting room as soon as possible.

Cosenzi agreed, and said the TommyCar Auto Group has responded with something called Click, Drive, Buy, a new program that enables someone to buy or lease a vehicle almost entirely from home and on the internet.

“Especially at our Volkswagen store, we’re seeing a lot of our customers complete the entire transaction online and just come into the dealership to take delivery of the vehicle,” she explained. “I don’t think we anticipated that it would be as popular as it is, but people enjoy the convenience; they like buying a car this way. And it’s been popular with people of all ages.”

Gearing Up

As he brought his forefinger ever closer to his thumb while comparing sales this year to last, Balise emphasized, again, that anything at or near last year’s mark is quite good.

And while he didn’t want to make too many projections about 2019, because things can change quickly, as history shows, he implied that he may well be doing the same thing with his fingers this time next year.

That’s because the basic laws of supply and demand — not to mention an economy still in high gear — should keep this industry operating in what amounts to the status quo.

And that’s a high-octane sales climate.

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

Business of Aging

One Step at a Time

Scenes like this one — from the 20th Rays of Hope Walk five years ago — are played out each October in Forest Park.

Scenes like this one — from the 20th Rays of Hope Walk five years ago — are played out each October in Forest Park.

Lucy Giuggio Carvalho is a tough person to say no to, as Kathy Tobin found out one afternoon 25 years ago.

“I was a health reporter for WGGB, and I was in the lobby of Baystate Medical Center to do a story,” Tobin told BusinessWest. “And this little petite thing comes walking across the lobby, points at me, and says, ‘I had a dream about you, and you’re going to help me.’ And that’s how I met Lucy.”

Carvalho — then a nurse at Baystate — had been diagnosed with breast cancer some time earlier, and, inspired by an AIDS fund-raising walk she had recently participated in, had a vision to bring something like that to Western Mass. to raise money and awareness around the cause of breast-cancer research and treatment.

A quarter-century later, it’s safe to say that Carvalho’s creation — known as the Rays of Hope Walk & Run Toward the Cure of Breast Cancer — has done just that, and a whole lot more.

As it turned out, Tobin did help her; WGGB became the media sponsor of the first Rays of Hope walk in 1994, and Tobin spearheaded a half-hour documentary special to bring attention to the cause.

“She had this overwhelming desire, not just to do this walk, but to change the way we treat breast cancer,” said Tobin, who has come full circle since then, now serving as director of Annual Giving and Events for Baystate Health, which has long overseen the Rays of Hope organization.

The first Rays of Hope event attracted some 500 walkers and raised $50,000. Today, it has raised more than $14.2 million and attracts about 24,000 walkers and runners each October. This year’s annual fundraiser, slated for Oct. 21, will once again step off from Temple Beth El on Dickinson Street in Springfield and wind through and around Forest Park.

As usual, all money raised remains local, administered by the Baystate Health Foundation to assist patients and their families affected by breast cancer. Funds support research, treatment, breast-health programs, outreach and education, and the purchase of state-of-the art equipment, as well as providing grants to various community programs throughout Western Mass. 

“Sometimes I can’t believe all that’s been accomplished,” Carvalho said. “I never would have believed we could raise the amount of money we raised; $14.2 million over the last 25 years is a lot of money, and we can do a lot of things with it — and we have. I’m really proud of Rays of Hope and all we’ve accomplished.”

It wouldn’t have happened, she added, without the continuing, loyal support from the community. “We’ve mostly accomplished what we have through individual walkers and local organizations that have supported Rays of Hope from the beginning. Most of the agencies that got involved in the early years are still involved, as well as the walkers; they come back year after year.”

Carvalho said she created Rays of Hope with a very specific vision.

“I wanted to help people that were going through breast-cancer treatment, to help them navigate the healthcare system,” she explained. “I’d found it difficult, and it was my motivation to make it easier for other people, seeing that I had such a hard time. And I wanted the money to stay local, too. That was really important for me.”

Beyond the critical funding, however, she has long recognized the importance of Rays of Hope as a bonding agent for individuals facing one of life’s most daunting challenges, and the people who love them.

Lucy Carvalho (left) and Kathy Tobin at the first Rays of Hope walk in 1994.

Lucy Carvalho (left) and Kathy Tobin at the first Rays of Hope walk in 1994.

“I think the event is very unique in that, when you’re there, it feels like there’s a big hug all around you, and that people really care about you. It’s just uplifting to be involved, and it’s something to look forward to, something that has become a tradition.”

Tobin also compared the event to a massive hug — one with a great deal of feeling behind it. “We have such a support system in place. It’s like a sorority — but I shouldn’t say sorority, because men are diagnosed, too. It’s just a network of people who care.”

Changing Times

Dr. Grace Makari-Judson has witnessed the evolution of Rays of Hope from a clinical standpoint; she was appointed medical director of Baystate’s breast program at the same time Carvalho was organizing her first walk.

“Lucy’s initial mission for Rays of Hope was not only helping breast-cancer research, but trying to provide coordinated care … a holistic approach,” Makari-Judson said — in other words, to make the journey easier for others than it was for her.

“Thinking back, it’s amazing how much we’ve been able to do with addressing those goals,” Makari-Judson went on. “Twenty-five years ago, women were having mammograms in the hospital, sharing the same waiting room with people who needed X-rays or had pneumonia. Biopsies were done in the operating room, and women got unnecessary scars.

“Today,” she went on, “we have a dedicated breast center where women go for mammograms and other breast imaging. We have needle core biopsy, which is done at the breast center and is a less invasive approach, so women go home with a Band-Aid instead of a scar. That’s the minimally invasive approach started in the mid-’90s and has since become the standard of care. It’s the whole philosophy of less is more.”

Other examples are sentinel node biopsy, introduced at Baystate in 1996, and radiactive seed localization, started in 2010. Both are minimally invasive procedures that Baystate pioneered in the region that have since become national standards of care, Makari-Judson said — and both benefited from Rays of Hope funding.

Meanwhile, Carvalho’s vision of more coordinated care has become reality as well, the doctor said.

Dr. Grace Makari-Judson

Dr. Grace Makari-Judson

“Twenty-five years ago, physicians were seeing patients all in a row — the surgeon, then the medical oncologist, then a radiation oncologist,” she explained. “And sometimes that would leave women with conflicting information. In today’s approach, we have something called a multi-disciplinary breast conference, where we get all the experts together to review radiology images and pathologist slides and come to a consensus recommendation. That has had a positive impact on care and really enhances our mission.”

It’s a model, she said, that started to coalesce around the time Rays of Hope was being launched, and it eventually spread to all Baystate hospitals and eventually became the model of care regionally and nationally.

“Everything about cancer has come such a long way,” Tobin agreed. “Women don’t have to wait days for biopsy results; they don’t necessarily have to have drastic surgeries. Everything about treatment has changed.”

“Twenty-five years ago, women were having mammograms in the hospital, sharing the same waiting room with people who needed X-rays or had pneumonia. Biopsies were done in the operating room, and women got unnecessary scars.”

Then there’s the Rays of Hope Center for Breast Cancer Research, launched in 2011 with the help of a $1.5 million Rays of Hope grant. The center brings together a group of scientists with diverse areas of expertise who work toward reducing the impact of breast cancer — for instance, understanding how obesity, diabetes, and environmental exposures interact to alter breast-cancer risk and prognosis.

It’s important work, and not something to be taken for granted, Tobin said, adding that many events like Rays of Hope eventually peter out — Avon’s national fundraiser for breast cancer isn’t continuing this year, for example — and such events require a lot of work and diligence to thrive and grow.

“Sometimes the fundraising becomes secondary,” she added. “After a while, people want to be a part of it, but they don’t remember the fundraising piece, and that’s critical to our survival. We’re trying to drive home the point that, yes, we need your involvement, but we also need your fundraising, because that’s what makes the programs happen.”

And it’s not just Baystate programs that benefit, Tobin added. Other local organizations, like Cancer House of Hope, also rely on support from Rays of Hope.

“We’re always getting new people involved,” Carvalho said. “Unfortunately, it’s often because they have breast cancer or someone close to them has breast cancer — but that passion keeps us going, and keeps us a vibrant organization. I think we’re always going to walk until there’s a cure, and we don’t need to walk anymore.”

Personal Impact

Denise Jordan was first introduced to Rays of Hope by her late friend, Tracy Whitley, and she joined its advisory board in 2008. A decade later, she’s chairing the 25th interation of the event, dedicating her service to Whitley, who succumbed to the disease last year.

Jordan calls herself an ambassador for Rays of Hope, making public and media appearances and encouraging people to take part in the Oct. 21 walk. She hasn’t found it to be a hard sell.

“I think, as long as people are affected by breast cancer, there will always be a willingness to participate in an initiative whose main focus is finding a cure,” she told BusinessWest. “Also, unlike a lot of organizations, when you give money to Rays of Hope, you can actually say, ‘the money I gave went to this person or that person; I know that because all the money stays right here in the region.’”

During her time as chief of staff for the city of Springfield, Jordan helped establish Pink & Denim Days, when city employees took up that dress code in exchange for donations to Rays of Hope. “It was really an easy ask,” she said. “Folks were very enthusiastic.”

Rays of Hope has proven to be a meaningful event for both survivors and supporters, as well as an educational experience for all ages.

Rays of Hope has proven to be a meaningful event for both survivors and supporters, as well as an educational experience for all ages.

So was Jordan, when she was asked to chair the event this year, even though she had some reservations about the time commitment. But when she thought about her Whitley, and the way she not only battled cancer but became a strong advocate for survivors, it wasn’t a hard decision.

“There’s going to be some special things happening that day,” she said of this year’s walk. “I’m pushing to get more people involved. We’ve had participants in the past who have missed a couple walks, but, this being the 25th anniversary, we’re hoping to bring a lot of folks back to the walk.”

Tobin agreed. “We’re adding some exciting elements. We’re going to tell the story of the progress we’ve made and celebrate some joyous stories of beating the disease — and remember those we’ve lost. I think there will be some special moments.”

Having been active in the walk for 25 years, Tobin has lots of stories, but likes to recount one from the event’s first year. Her 4-year-old son attended and took in the speeches, and as he settled into his car seat for the ride home, he said, ‘I’m so glad I’m not a girl.’

“My feminist self practically slammed on the brakes,” she laughed. But when she asked why, “he said, ‘because I can never get breast cancer.’

“The earnestness of this little boy took my breath away,” she continued. “I realized in that moment the impact this walk was having, and could have, if someone that young understood the seriousness of breast cancer.”

The fact that he assumed it was a girl’s disease isn’t odd; many adults think the same thing, and Rays of Hope has created plenty of teaching moments around that misconception as well.

In short, it’s hard to overestimate the impact this 25-year tradition has had on breast-cancer treatment, research, awareness, education — not to mention the giant hug of support that so many women (and men) need.

“Lucy had certainly given us a gift,” Tobin said. “She had done something incredible in that parking lot that day, and $14.2 million later, we’ve seen a lot of profound moments.”

Added Carvalho, “there’s a spirit at Rays of Hope, and I don’t know exactly how it came to be, but it’s real, and it’s powerful, and it’s heartwarming. That’s what I’m proud of — how the community has come together to make a difference.”

Joseph Bednar can be reached at [email protected]

Banking and Financial Services

Sowing Seeds

Julia Coffey brought this selection of mushrooms to a local farmers market

Julia Coffey brought this selection of mushrooms to a local farmers market. She also sells to restaurants, campus food services, and other food distributors.

Julia Coffey’s business was mushrooming — in more ways than one.

In fact, her enterprise, Mycoterra Farm, specializes in mushrooms. And when she was looking for a larger space in which to grow, she received a fortuitous phone call.

“In mushroom production, as with much agriculture, efficiency of scale is big — and we had maxed out capacity at our farm in Westhampton,” Coffey said.

She found a closed equestrian center on the market in South Deerfield that would make an ideal space, and initially pursued loans through the USDA Farm Service Agency. But she still needed more funding to get up and running on the new site.

“We were trying to figure out how to get the new farm online with a little less money than I needed, and it was Rebecca who reached out to me to see if we had any funding needs,” she recalled. “It was very timely.”

That was Rebecca Busansky, program manager for the Pioneer Valley Grows Investment Fund, or PVGrows for short, a regional investment and loan program launched in 2015 that provides financing and technical assistance to food and farming businesses in Western Mass.

“We really set out to help the whole food system. This is about farms and local food businesses and everything that makes a healthy food system,” Busansky told BusinessWest the day after the Franklin County Community Development Corp. (FCCDC), which oversees the fund, marked the project’s three-year anniversary with a celebration at Raven Hollow Winery at Koskinski Farms in Westfield.

It wasn’t just an anniversary being celebrated, but a funding milestone — $1.25 million, in fact, halfway to the fund’s original goal of $2.5 million. That money has helped more than 25 local farms and food entrepreneurs grow their businesses — and, in turn, a critical sector of the Western Mass. economy.

Mycoterra is a good example. The gourmet and exotic mushroom farm, as Coffey described it, grows “wood-loving” mushrooms indoors year-round. Mycoterra specializes in shiitake, oyster, and lion’s mane mushrooms, but experiments with many other varieties as well — and, in doing so, impacts scores of other food-related businesses.

“We market directly to farmers markets, about 50 restaurants statewide, and campus food services, and with the recent move, we’re increasing production and are working with a number of local distributors,” she noted.

John Waite, executive director of the FCCDC, said PVGrows offers an innovative, mission-driven way for community members to invest in their values by supporting and sustaining businesses that can make real changes to how food is grown, distributed, and purchased. “It takes the local movement to a whole new level. It’s beyond eating local — it’s investing locally.”

Good Idea, Naturally

To date, nearly 50 investors, including individuals, businesses, and foundations from New England and New York, have contributed a minimum investment of $1,000 to the fund, with interest paid annually, Busansky explained. These community investments are pooled together to provide the financing that farm and food entrepreneurs need to grow their businesses.

The fund grew out of existing FCCDC programs that provide technical assistance to local farms and food producers in the Valley, she added, noting that a need became evident for a funding source specifically aimed at benefiting these businesses.

Jennifer Ladd says supporting local food production brings cultural, economic, and even regional security benefits.

Jennifer Ladd says supporting local food production brings cultural, economic, and even regional security benefits.

Three foundations have been important to the fund’s growth: the Solidago Foundation, the Lydia B. Stokes Foundation, and the Henry P. Kendall Foundation, which collectively established a loan-loss reserve. A community pool was then established, accepting investments of $1,000 to $10,000 with a five-year term and a very low interest rate.

“We felt it was important to add this community-investment piece,” Busansky said. “The whole idea was to make it a minimum $1,000 to invest, which doesn’t make it completely accessible to everyone, but it’s not only open to wealthy people, either. It democratizes capital.”

Larger investments come with longer terms and higher interest rates, with the idea that investors with a little more money could be willing to take on more risk, Busansky added. But so far, there hasn’t been much risk for investors.

“We have 25 well-performing businesses borrow from us so far, and we haven’t touched the loan-loss reserve — in part because we give a lot of technical assistance.”

Coffey described the loan process as easy to navigate, but that straightforward experience wasn’t the only thing that impressed her.

The recent three-year anniversary celebration featured food provided by many of the fund’s borrowers.

The recent three-year anniversary celebration featured food provided by many of the fund’s borrowers.

“I’ve got a background in bookkeeping, so I feel I had some skill sets that some people don’t,” she said. “But they were prepared to offer technical assistance, too, for people and startups and agricultural food businesses that need it. They are a very knowledgeable resource, and it was great getting things established right away.”

The FCCDC has been involved in small-business lending for close to 30 years and has plenty of expertise in providing guidance to young enterprises, Busansky noted, from business plans to websites. So she’s not surprised the PVGrows fund has found early success in its mission. “We have a system in place that’s worked well, and now we’re ready to seek the additional $1.25 million in commitments.”

Jennifer Ladd is one of those investors. “You don’t have too be a wealthy person to invest in Pioneer Valley Grows, which I think is a wonderful thing about it,” she told BusinessWest.

“Supporting agriculture in this Valley feels like contributing to a sense of vitality. It’s the same kind of feeling I get when supporting the arts — there’s creativity, growth, collaborations between people,” she went on. “And there are multiple layers of assurance that your money will actually have an impact and be of service.”

Ladd said the low interest rates for investors shouldn’t deter anyone because most people getting involved in this do so because they believe in the value of supporting local farm and food businesses.

“I enjoy cheese, fruits, vegetables, and wine around here, and I don’t mind not getting much of a financial return,” she said. “I’m choosing low interest because that serves people just starting out. These new endeavors need time to get their roots in the ground, so to speak, and this money can help them do that. It will yield benefits in many ways.”

Some of that benefit is cultural, she added, contributing to quality of life and a certain agricultural fabric of the region, as well as a sense of connection with people who thrive off the land and wind up feeding their neighbors.

“We don’t have huge farms here, like in the Midwest, with thousands of acres of corn. This is agriculture we actually do benefit from immediately,” Ladd said. “I also feel like it’s contributing to my sense of security; with climate change and the volatility we see in the world, it’s good to have food being produced locally. So it’s a sort of regional security that has a payoff right now.”

Green Thoughts

Food and farm businesses applying for financing and business support through the PV Grows Investment Fund are vetted for mission fit by a consortium of community-lending institutions and food and agriculture specialists, Busansky explained.

Terry and Susan Ragasa, owners of Sutter Meats in Northampton, were among the early borrowers. “From start-up funds to get us open to facilitating a business consultation to get us to the next level, the PVGrows Investment Fund has been an incredibly supportive asset for Sutter Meats,” Terry noted.

Coffey has had a similar experience, as she grows a business that takes agriculture and sustainability seriously. Her mushrooms are handcrafted in small batches, and her natural methods of production accelerate decomposition, build soil, and cycle nutrients — critical processes for healthy ecosystems, she explained.

In turn, she also appreciates the financial ecosystem being created through the PVGrows investors and borrowers. She said she ran into an old friend recently who had invested in the fund, around the same time Coffey became a borrower, and it struck her how PVGrows is essentially neighbors helping neighbors — and helping a critical part of the region’s economy succeed.

“Western Mass. has a phenomenal agricultural economy, not just the producing, but the processing, and the loan program helps add layers to it,” Coffey said. “We eat really well locally, but the funding and the technical aspects of setting up a business — and setting up a business well — is something that is often overlooked.”

As the fund expands, the hope is that Mycoterra won’t be the only agricultural business in the region that’s mushrooming.


Joseph Bednar can be reached at [email protected]

Business of Aging

The Power of Movement

Chad Moir turned his resentment against Parkinson’s disease into a chance to help others fighting the disease that took his mother.

Chad Moir turned his resentment against Parkinson’s disease into a chance to help others fighting the disease that took his mother.

As they don boxing gloves and pound away, with various levels of force, at punching bags suspended from the ceiling, the late-morning crowd at this Southampton gym looks a lot like a group exercise class at a typical fitness center.

Except that most of them are older than the usual gym crowd. Oh, and all of them are battling Parkinson’s disease.

“A lot of them have never boxed before in their lives, and now they get to put on gloves and punch something,” said Chad Moir, owner of DopaFit Parkinson’s Wellness Center in Southampton. “Some are hesitant at first, but usually the hesitant ones are the ones who get into it the most.”

Tricia Enright started volunteering at DopaFit before joining Moir’s team as a fitness trainer.

“I just fell in love with the people,” she told BusinessWest. “I absolutely love my job, and I don’t think many people can say that. But you come here, and they inspire you in so many different ways — they walk in here with all these things they’re dealing with and get in front of these bags, and they’re pushing it and fighting. It’s so amazing to see. It makes me want to come to work every day, which is not something I’ve experienced before.”

Tricia Enright says she’s inspired not only by members’ physical progress, but by the support they give each other as well.

Tricia Enright says she’s inspired not only by members’ physical progress, but by the support they give each other as well.

It’s not just boxing. Members at DopaFit, all of whom are at various stages of Parkinson’s, engage in numerous forms of exercise, from cardio work to yoga to spinning, and more. On one level, activities are designed to help Parkinson’s patients live a more active life by improving their mobility, gait, balance, and motor skills.

But research has shown, Moir said, that it does more than that: Exercise releases the neurotransmitter dopamine into the brain, slowing the progress of Parkinson’s symptoms.

Moir has seen those symptoms first-hand, by watching his mother, stricken with an aggressive form of Parkinson’s, decline quickly and pass away five years after her diagnosis.

“She went through a hard diagnostic process,” he said. “There were probably about three to four years where we knew something was wrong; she was going to the doctor, but they couldn’t figure out what it was. There are symptoms of apathy and depression and anxiety that come along with Parkinson’s, and those manifested first. So they were trying to treat it as a mental-health issue, but Parkinson’s was underlying everything the whole time. Eventually she got her diagnosis, and from there she deteriorated pretty quickly.”

Moir said he took his mother’s death hard. “I fell into a bit of a depression. I hated Parkinson’s disease and everything to do with it. I didn’t even want to hear the word Parkinson’s. But one day, something clicked, and I decided I was going to use my resentment toward Parkinson’s in a positive way and start to fight back.”

He used a half-marathon in New York City to raise some money for the Parkinson’s Disease Foundation, and ended up collecting about $6,000 — an exciting tally, as it was the first time he’d ever raised money for a cause. And he started to think about what else he could do for the Parkinson’s community.

“At that point, I was a personal trainer, and the more I looked into it, the more I found out that exercise is the best thing someone with Parkinson’s can do. All the research shows that it can slow the progress of some of the symptoms of Parkinson’s, so I started researching what people with Parkinson’s could do through exercise.”

He started working with individuals in their homes, but a visit to a support-group meeting in Southwick was the real game changer. “I asked the people there if they wanted a group exercise class, and they said ‘yes,’ so I started one. I think we had four people at first.”

These days, a visitor to DopaFit will typically see around 25 people working out. “Really, it’s set up like a regular gym would be — aerobic training, running, dumbbells,” Moir said.

“At that point, I was a personal trainer, and the more I looked into it, the more I found out that exercise is the best thing someone with Parkinson’s can do. All the research shows that it can slow the progress of some of the symptoms of Parkinson’s, so I started researching what people with Parkinson’s could do through exercise.”

The difference is the clientele — and the progress they’re making toward maintaining as active a life as they can.

Small Steps

The first DopaFit gym was launched in Feeding Hills in 2015, but moved to the Eastworks building in Easthampton a year later. This year’s move to the Red Rock Plaza in Southampton was a bid for more space; ample parking right outside the door and a handicapped-accessible entrance are pluses as well.

Meanwhile, a second DopaFit location in West Boylston — Moir lives in Worcester — boasts about 20 members.

When the business was starting out, Moir was studying occupational therapy at American International College. “That’s a grueling program, so I had to make a choice — and I don’t love school as much as I love this. The deal with my wife was that I could leave the OT program, but I’ve got to finish my degree.”

Today, he’s back at AIC, working toward a degree in public health. “They’ve been instrumental and supportive of what I’m doing here, creating a business and working with this population,” he said. “Any time you’re helping the public with a healthcare need, it becomes public health.”

The Southampton gym runs classes four days a week — exercise groups on Monday, Tuesday, and Thursday, and a yoga session on Wednesday. “Most people come two or three times a week, but some come every day,” Moir said, adding that members with jobs often make time for exercise before or after their work schedule.

Individuals are referred to DopaFit by their therapists, neurologists, movement-disorder specialists, and family members as well.

“Some go to their neurologist, who says, ‘you need to exercise,’ and they find out about us, exercise here for six months, go back to the neurologist, and their scores are better than they’ve been. When the neurologist finds out they’re going to DopaFit, they reach out and start referring more people. The proof is in the pudding.

“Exercise is the best medicine,” he added. “Your pills are great because they help with the symptoms of Parkinson’s, but when the medicine wears off, the symptoms come back right away. The exercise helps prolong some of that, so you’re less symptomatic for a longer period of time.”

When they first arrive at DopaFit, members undergo an assessment of where they are physically and where they would like to be in six months. Then they’re assigned to one of two exercise groups. No Limits is made up of people who don’t need assistance getting in and out of chairs and can move about freely with no assistive equipment, like canes, walkers, or wheelchairs. The second group, Southpaw, requires a little more assistance.

“The exciting thing is, some of those people come to that class with canes and eventually come in with no canes, and eventually they’re in the next class, running and jumping around,” Moir said. “Especially for someone who’s been sedentary for a while, it really makes a huge improvement.”

He said studies have shown that Parkinson’s patients who have been sedentary can show improvement in their symptoms simply by getting up and doing the dishes or another minor task each day, just because they’re up and moving. “If you take someone sedentary and get them moving in a training facility, sometimes the outcomes are almost immeasurable.”

Not to mention that exercise can be fun, Enright said.

“You get these people on the floor with a hockey stick and a ball, it brings them back to when they were 8,” she said. “They’re spinning and jogging, and it’s just so neat to see what it brings out in them. It’s such a testament for what this does for them. They’re pretty inspiring.”

Special Connections

Between the business and his studies, Moir doesn’t have a lot of time to stand still, but he said he occasionally allows himself to step back and let the potential of DopaFit sink in.

“I’ve been so deeply involved in it that I forget how special this really is,” he told BusinessWest, and not just because of members’ physical progress, but their growing confidence.

“A lot of times, they’re leery of going out to eat because they can’t eat a bowl of soup, or their food’s going to be shaking off the fork. When they come here, they don’t have to worry about that, or they talk about that with each other and tell each other, ‘oh this is how I get around that.’ Or, ‘when I go to this restaurant, I order this because it’s easier to eat.’”

Those conversations and the social support they gain at DopaFit hopefully translate to greater confidence in other areas of their lives, Moir said. “That support system is huge, and it’s special.”

Enright agreed. “They’re such a close group, and the support they receive is as important as the exercise, and they come for that too. But the physical piece really is amazing, to watch them slow the progression of the disease because of what they’re doing here.”

She said members are excited when they visit their neurologist, and the doctor is pleasantly surprised with how they’re managing their symptoms. “Exercising gives you a lot of confidence in your physical ability anyway, so that’s really cool to watch. They’re amazing.”

In addition to the exercise and yoga, DopaFit also hosts the Smile Through Art Workshop once a month, an art program for individuals with Parkinson’s disease that’s run by Moir’s wife, Saba Shahid.

“It’s even more gratifying knowing that, every day, I get to honor my mother. What’s happening here is a living testament to the values she instilled in me.”

“It’s the only art program in the country designed specifically for people with Parkinson’s,” he explained. “We do different art projects that work on different symptoms of Parkinson’s disease, like tremors. Or we’ll do a workshop on handwriting.”

One goal of that particular class is, simply, the increased independence someone gets by being able to sign a check or do any number of other tasks that most others take for granted. “When you give that back to someone, it’s another barrier they feel they can successfully navigate in society.”

Moir has certainly navigated his own path since those days when he was so angry about his mother’s death that he couldn’t even think about Parkinson’s disease.

“It’s even more gratifying knowing that, every day, I get to honor my mother,” he said. “What’s happening here is a living testament to the values she instilled in me.”

Joseph Bednar can be reached at [email protected]

Autos

Expansion Mode

Carla Cosenzi says the recently acquired Volvo dealership in South Deerfield is a perfect fit for the TommyCar Auto group.

Carla Cosenzi says the recently acquired Volvo dealership in South Deerfield is a perfect fit for the TommyCar Auto group.

Carla Cosenzi says that, like most companies in its category, the TommyCar Auto Group is always on the lookout for possible additions to the portfolio of dealerships.

But growth for the sake of growth is not what this venture — started by her father, the late Tom Consenzi, and taken to a new level by Carla and her brother, Tom — is looking for.

“It’s important for us to have the right brand at the right time and the right location moreso than just looking to grow,” she told BusinessWest, adding that all those boxes could certainly be checked with the company’s recent acquisition of Pioneer Volvo in South Deerfield.

Right location? Check. The dealership is only a few miles north on I-91 from the group’s other facilities — Northampton Volkswagen and the adjacent Country Hyundai, as well as Country Nissan on Route 9 in Hadley.

Right brand? Check. Volvo has always been renowned for its quality and focus on safety, and it has recently introduced several new models, including a small SUV, the XC40, that is turning heads in the industry.

Right time? Check. Auto sales in 2018 are just slightly off the levels set in 2017 — although the TommyCar Auto Group has registered growth over that span — but overall volume remains at very high levels.

Overall, this acquisition is solid in every respect, said Cozenzi, adding that that it gives the TommyCar Auto Group its first real entry into the luxury-car bracket, meaning a brand that won’t really compete with the three sold just down the interstate.

Meanwhile, the group’s size and economies of scale will enable it to give the Volvo dealership greater visibility and opportunities to grow.

“It’s a small dealership, and it was family-owned and operated, so we’re going to continue the same values they had,” she explained. “But since we’re a bit of a larger group, we have the ability to add more amenities than they were able to provide, but with the same core values.

“We’ll grow the brand — we’ll give the brand more exposure through advertising,” she went on. “And since we’re a larger group with more of a following, we’ll be able to attract more people to the dealership, and to Volvo.”

Given all this, it’s understandable why the TommyCar Auto Group has had its eye on the Volvo dealership for some time, and also why it moved quickly and decisively when the family-owned operation came on the market earlier this year.

“It’s a small dealership, and it was family-owned and operated, so we’re going to continue the same values they had. But since we’re a bit of a larger group, we have the ability to add more amenities than they were able to provide, but with the same core values.”

“This is a brand that we’ve been looking at for a long time because it fits in well with the other manufacturers we have in the group, it’s a great location, and it’s a perfect size for us,” she explained. “We’re really attracted to Volvo and everything it stands for in terms of luxury and convenience it provides to customers, the value of the brand, and the safety of the vehicle.”

Cozenzi said the dealership in Deerfield is, indeed, small compared to most these days, and not exactly modern. However, it is comfortable and well-appointed. She said it is likely the company will renovate it in the short term and replace it in the long term, meaning over the next several years.

In the meantime, as she said, it is a solid addition to the portfolio, a brand with a number of redesigned models, cars, and SUVs alike.

“So it’s an exciting time for us to be getting involved with the brand,” said Cosenzi, citing the XC 40 as one example of a Volvo model in strong demand. “I’m coming to learn the brand, and it’s clear that they’re very innovative.”

As an example, she noted ‘Care by Volvo,’ a comprehensive package of services that brings new layers of convenience to customers.

“They take care of the essentials when they lease you a vehicle, including insurance, maintenance, repairs, a concierge service, and more,” she said. “So you can see them changing with the times, and it’s exciting to be partners with an manufacturer that’s so on edge with what’s happening.”

Like she said … the right brand and the right time — and the right location.

— George O’Brien

Business Management

The Forces of Change

“People don’t change unless the pain of not changing becomes greater than the pain of change.” That was one of many observations made by those presenting the latest installment of BusinessWest’s Future Tense series late last month. The more important point made: by the time companies get to that point, it might just be too late to change.

‘Burn the boats.’

That’s supposedly what the Vikings did before entering into battle — a bold indication that there would be absolutely no turning back from a particular course of action — and the phrase has become heard with increasing frequency in boardrooms across this country and in many others.

And Mark Borsari, president of Palmer-based wire-brush manufacturer Sanderson MacLeod, made it one of many phrases (and takeaway strategies) he offered as co-presenter of the latest installment in BusinessWest’s ongoing and appropriately titled Future Tense series.

Borsari shared the podium with Jim Barrett, managing partner at Holyoke-based Meyers Brothers Kalicka, and advice not to be afraid to burn the boats was among the many messages they passed along to audience members during a program titled “Change Considerations: An Examination of Lean Process, Market Disruption, and the Future of Your Business.”

The two focused on every phrase within that long title, but especially that one word ‘change.’ Like others who presented in this series before them, they noted that change is coming at business owners at an unprecedented pace and scale. And while there are some changes that cannot be foreseen or remotely planned for — Barrett summoned the example of the city of Westfield, a buggy-whip manufacturing hub that was one of few communities worldwide economically devastated by the invention of the automobile — there are things business owners can and must do.

Over the course of their talk, Barrett and Borsari listed several — from embracing new technology to being ultra-diligent when it comes to investing in it; from watching the horizon for imminent changes to recognizing emerging new trends in workforce skill sets; from embracing lean practices (whatever your business sector), to, yes, being fully prepared to burn the boats when it comes to all or most of the above.

Mark Borsari says his parents used the wet-facecloth method to get him up in the morning

Mark Borsari says his parents used the wet-facecloth method to get him up in the morning, and now he manages his company with the same mindset.

“You need to have confidence in what you’re doing,” said Borsari, noting that many lean initiatives and investments in new technology fail because leadership lacked the confidence to ride out the inevitable early questions and problems that accompany change. “If you’re a leader, stick with it; you have to burn the boats.”

One also has to keep his head out of the sand, he went on, referencing a business he was once in — the making of dentures — to get his points across.

“If you’re a leader, stick with it; you have to burn the boats.”

“That technology had not changed, until about 2004, in 150 years,” he explained. “You’d go to the dentist, the guy would put that big plastic thing with a bunch of goop in your mouth, make an impression, and send it off to a dental laboratory to a dental technician who would, by hand, make teeth; they were getting $120 to $130 a unit on average.”

By 2006 or so, intra-oral scanning had completely changed the landscape, he said, adding that a milling center in a dentist’s office can now make a tooth in hours instead of days and for a fraction of the cost.

“That is technology that is absolutely disruptive; if people in that industry were watching, they would have seen what was coming, but they missed it,” he noted. “Now these technicians have milling centers in their laboratories, and they’re making $40 a unit. You go from $120 to $40 with inflation — that’s the stuff that scares you to death.”

Barrett agreed, and for another example of not recognizing what in hindsight, or even careful foresight, seems obvious, he recalled Jim Keyes’ now-infamous quote from a decade ago: “Neither Redbox nor Netflix are even on the radar screen in terms of competition; it’s all Walmart and Apple.”

“Two years later, Blockbuster files for bankruptcy, and today, Netflix is worth about $62 billion. That’s how fast change can happen, and if you don’t anticipate the disruption, chances are you’re not going to make it,” said Barrett, adding that the business landscape is littered with similar examples of companies moving too slowly, or not moving at all, to anticipate change and get ahead of it.

How and why does that continue to happen?

“People don’t change unless the pain of not changing becomes greater than the pain of change,” said Barrett, adding that companies and business sectors are going to keep doing what has made them successful until it becomes more than obvious that they can no longer do that.

But at the rate change is happening, that won’t be possible in the near future. By the time the pain of not changing exceeds that of changing, it may be too late to change.

For this issue, BusinessWest recaps the third segment in its Future Tense series, a presentation that brought home the need for business owners and managers to prepare for and be able to withstand what can possibly come at them in the months and years to come, rather than be a buggy-whip maker in the age of the automobile.

Brush with Fame

Rosie Noble worked at Sanderson McLeod for a half-century, Borsari told those gathered at Tech Foundry for this installment of Future Tense. Her job — no, make that her domain — was a specific wire brush, or stylus, made for the healthcare sector.

“Rosie walked seven miles a day, 14 feet at a time, for 50 years — she has 2% body fat,” said Borsari as he attempted to draw a picture of how these brushes were made. “You are not going to find another Rosie Noble working for Sanderson MacLeod, walking seven miles a day, making brushes for the rate we were paying. And Rosie wants to retire; what do you do?”

The answer was the Rosie 2, built with her input. It’s the world’s first (and only) fully automatic twisted-wire stylus machine — technology that does essentially what its namesake did starting when Lyndon Johnson was in the White House. Ultimately, Borsari said, the company didn’t build this machine because it wanted to, but because it had to to remain competitive.

“People don’t change unless the pain of not changing becomes greater than the pain of change.”

The Rosie 2 is a great example of a company adapting to change, embracing and utilizing technology, and finding better and more efficient ways to do things, he noted, adding that, moving forward, it’s incumbent on all business owners and managers to write their own Rosie stories.

Jim Barrett

Jim Barrett says that, while lean practices are most commonly associated with the factory floor, this is a strategy, and mindset, that all business sectors must embrace.

There are many factors involved in this equation, said the presenters, starting with the world of work and the rapid pace of change of pace in that realm, most of it driven by technology.

To sum it all up, Barrett talked about this country’s new Lockheed-Martin F-35 fighter jet, a plane that uses artificial intelligence to self-diagnose its needs in term of fuel, parts, maintenance, ammunition, and more. Those servicing the plane don’t have to accumulate that data, as they did with past models, because the plane provides it for them.

Emerging technology does essentially the same for business owners across virtually all sectors, he went on, adding that, in the future (and even today, for that matter), employees, especially those involved in finance, won’t be needed to gather or even analyze information — again, because technology, like Blockchain, will do that for them.

“Today, a large part of the financial function is data analysis; 60% to 80% of the time is spent gathering data and making that sure that data is compatible, either between years or sets or whatever metric you’re trying to measure to: ‘do we have the right data? Is it good data? Is it compatible?’ — 60% to 80% of the time!” he said. “Moving forward, that’s largely going to be automated out of existence, all that time is going to be freed up, and that’s going to be a huge disruption to the financial function of industries.”

Instead, one of employees’ primary functions is to take the information available to them and help management decide what to do from a strategic standpoint. And to do that, they’ll probably need different skill sets than they have now, said Barrett, adding that they’ll need to do everything from “help the company make smart bets,” as he called them, to making sure the business is using the right data and the right metrics.

Instead of counting money in the cash drawer and figuring out where it came from, the retail finance employee of the future (or today) will need to be able to help answer questions like, ‘should we open a new store or close a store?’ ‘Do we go online?’ ‘How much does that cost?,’ said Barrett.

“And that’s a whole different skill set than the finance function of the past,” he went on, adding that employers and human-resources professionals need to be aware of these changes as they create their workforces.

“What people in the finance function need to understand is they need to adapt to this information, because what made them successful in the past is not going to make them successful or, like the buggy whip, relevant in the future,” Barrett noted. “If you’re still counting cash, your competition is way ahead of you.”

Investments in the Future

Borsari agreed, and said that knowing what to do with both data and emerging technology is the biggest challenge facing business owners and managers today.

With that, he clicked to a PowerPoint slide with two images — one of a palm tree, the other of an iceberg — and kept it there for a few moments as he talked about the immensely difficult and far-reaching decisions business owners face when it comes to investing in technology.

“Those of you who run businesses or run companies or organizations and have to make these decisions know that it’s exhausting — absolutely exhausting,” he said. “Our job, when you get right down to it, is to be on the bow of a ship looking out and seeing what’s on the horizon long before it gets there. It’s either an iceberg that’s going to put a hole in the side of the ship and sink you, or a pretty place you might want to take the company and go sailing.

“What people in the finance function need to understand is they need to adapt to this information, because what made them successful in the past is not going to make them successful or, like the buggy whip, relevant in the future. If you’re still counting cash, your competition is way ahead of you.”

“And it’s exhausting because you’re getting bombarded from all sides,” he went on. “Our challenge is, ‘how do we look at the palm trees and the icebergs and sort out what is the technology we think is relevant, what we think works for us, and what doesn’t?’”

Elaborating, he said the place companies must start is with a basic question: what is the technology for? And until it’s answered, the checkbook should certainly stay in the drawer. The goal, he went on, is to embrace and choose technology that enhances that which already separates you in the marketplace.

“Understand what the value-driver is for your customer,” he told his audience. “What do they come to you for? Then determine if technology is going to help you, neutralize you, or put you at a disadvantage. Once you buy it, you own it.”

Borsari noted that Palmer-based Sanderson MacLeod is not going to make wire brushes less expensively than companies in China, or almost anywhere else, given the high cost of doing business in this state.

“So why do people buy from us?” he asked rhetorically before answering that question for the audience.

“Our feeling is that our customers have to think that they’re either with us or that not being with us is a competitive disadvantage,” he said, adding that the company is known for its innovation and making products that stand out in the marketplace.

“These are the things that we think about when we consider technology,” he explained. “Is it going to help us with this, or does it make us more of a commodity?”

This discussion of technology and investments in it led naturally to another of those phrases in the program’s title — lean process.

Lean, the science of taking waste out of the process, can help drive decisions on technology investments, said Borsari, who cited the ‘5 Ms’ of waste — man, machine, method, materials, and money — and the need to identify which one (or ones) are the target of new technology.

“What are you buying the machine for?” he said. “Sometimes you think you’re chasing something, and you realize that’s not what you’re really chasing.”

What all companies are chasing are greater efficiencies and better ways of doing things, said Barrett, adding that a great misconception in business today is that lean is just for the manufacturing floor.

That’s a very limiting attitude, said Barrett, adding that Meyers Brothers, and the financial-services sector as a whole, is starting to embrace lean — out of necessity more than desire. But there are hurdles to be overcome, he said, primarily because these businesses are “dealing with people, not machines, and people are resistant to change.”

“We’re great at analyzing data — we made a career analyzing data — and people love to sit at their desks and play with spreadsheets,” he explained. “But that’s not valuable anymore; people are going to continue doing what made them successful over the past 30 years, even though times are changing.”

That’s why, said both Barrett and Borsari, what a company ultimately needs to change through lean isn’t equipment, technology, or even processes — but the culture.

The Naked Truth

Borsari called it ‘wet-facecloth management.’

And, obviously, he needed to explain that.

“When I was a kid, my parents didn’t like me sleeping in,” he noted. “They’d come in the first time and say, ‘you’ve got 10 minutes to get up.’ If I didn’t get up in 10, they’d say, ‘you’ve got five minutes, then we’re coming up with a wet facecloth.’

“It is impossible to not deal with reality when you’re facing a cold facecloth in the morning,” he went on, adding that the tactic almost always worked, and today, he more or less runs Sanderson MacLeod the same way. Reality, in this case, isn’t having to get out of bed, but to operate with the full knowledge that a few mistakes, or even one big one, can make your company the next Blockbuster or the next Kodak, a venerable institution that just didn’t position itself for the advent of digital photography.

With that, he said ‘wet-facecloth management’ means avoiding certain attitudes, including putting a company’s collective heads in the sand, as the dental technicians obviously did at the start of this century.

“Their heads were in the sand; there’s no question that there was technology coming up that would make a tooth faster than layering porcelain by hand,” he said. “You have to question yourself, and you have to have people in your organization who are empowered to challenge you on that.

“You want them reading, and you want them not feeling that if they come to you with an idea that’s a little out of whack, they’re not going to have your ear,” he went on. “But you have to make sure you don’t get your heads in the sand when it comes to technology, because if you do miss a major one, that will shut the doors.”

Another mindset to avoid is ‘magic-bullet thinking,’ he went on.

“This is where someone goes to a presentation, comes back, and says, ‘we have to buy this thing; it’s unbelievable,’” he said. “That’s dangerous; there are no magic bullets. There are things that will help you, but there are no magic bullets. I’ve bought magic bullets. They don’t work.”

Still another mindset to avoid, said both Borsari and Barrett, is the thinking that all the answers have to come from inside the company.

The proper mentality is to ‘get naked,’ as Borsari called it.

“I encourage people to get out and see other companies, and to have people come and pull you apart,” he explained. “Bare what you have; you want an idea that can come through and change things, but don’t get into thinking that you have everything covered, because you don’t.”

Barrett agreed, and said one of the bigger challenges facing businesses in all sectors is changing the culture of an organization and inspiring people to think lean, avoid magic bullets, and get their heads out of the sand.

What’s needed is a compelling message, he told BusinessWest.

“To stand in front of people and tell people they need to be more efficient because if we’re not more efficient and we’re not doing it better, we’re going to be out of business — that’s not really motivational to a lot of people,” he explained. “You need to find some way to engage them.

“In our business,” he said, “that might be to say, ‘yes, you might lose 60% to 80% of what you used to do, but if you understand that, you can now spend your time going out to customers and trying to help them with their business, and you can do better stuff that, A, they value, and, B, they’re going to pay more for, and you can have a better feeling when you leave that you helped somebody, as opposed to reading spreadsheets.’

“The message can’t be, ‘we have to be lean because we don’t we to be the next Blockbuster,’” he went on. “The message has to be, ‘we have to be lean so we can do better, higher-value stuff that’s more rewarding for us and more valuable for our customers.”

Bottom Line

‘Wet-facecloth management?’ ‘Burning the boats?’

These are not phrases you would probably hear in the boardroom 20 years ago, or even a few years ago.

But you hear them now, because the times (maybe you’ve heard this) are changing. And change is coming quickly and profoundly, and companies need to be aware that they have to change attitudes and change the way they do things.

As Barrett so aptly put it, businesses, and especially those who lead, simply can’t wait around until the pain of not changing becomes greater than the pain of change.

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

Berkshire County

Changing the Narrative

Created through the merger of several economic-development-focused agencies, 1Berkshire has a broad mission statement, but it can be boiled down to making this unique region a better place in which to live, work, and do business.

Jonathan Butler says he grew up during what was, in most all respects, a down time for many communities in the Berkshires.

This was a period — a few decades in length, by most estimates — when General Electric in Pittsfield and Sprague Electric in North Adams were slowly disappearing from the landscape and taking roughly 25,000 jobs with them.

Butler told BusinessWest that he’s heard countless stories about what it was like when those huge employers were in their heyday and the downtown streets were clogged with people on payday — and every other day, for that matter — and seemingly everyone who wanted or needed a job had one.

“But that’s not part of my narrative,” he said, adding that he grew up on the other side of all that, when the downtowns were populated largely by empty storefronts and jobs were much harder to come by.

“The good-old-days stories are actually getting quite old,” he went on. “That’s because a few generations have grown up not knowing them.”

Instead, there are new stories being told, said Butler, involving everything from ziplining to craft beers; from health spas to new and exotic eateries; from communities’ populations getting larger to populations getting younger.

Indeed, the best stories involve people — a lot of them just like Butler — who grew up during those darker times, left the area (because that’s what they thought they had to do), and are now coming back to enjoy all of those things mentioned above.

Jonathan Butler

Jonathan Butler

“The good-old-days stories are actually getting quite old. That’s because a few generations have grown up not knowing them.”

“We’ve really changed the narrative around what it’s like to live in the Berkshires,” he noted. “People my age that grew up here, went away, and have had the chance to come back, whether it’s to live here or visit family, are shocked at what they see.”

This changing of the narrative was and is the unofficial mission statement for 1Berkshire, an economic-development-focused organization that resulted from the merger of four agencies — the Berkshire Chamber of Commerce, the Berkshire Convention and Visitors Bureau, the Berkshire Economic Development Corp., and Berkshire Creative, a support organization for entrepreneurs and those involved in the arts.

Housed in an historic former firehouse called Central Station in downtown Pittsfield, 1Berkshire’s employees are focused on a number of strategic initiatives collectively aimed at advancing the region’s economy and making this a better place to live, work, visit, and operate a business.

“We spend a lot of time and energy bringing visitors to the Berkshires, but we also spend significant time and energy promoting this as a place for families and for people to relocate to,” he explained.

The ‘visit’ component has always been a huge part of the equation, said Butler, noting that tourism has long been the primary economic driver in the Berkshires. That’s still true today, but visitation is becoming more diversified, or “rounded out,” as he termed it.

 

“We have an extremely robust visitor experience here,” he noted, adding that that tourism spending, up 30% over the past decade ago, now averages about $500 million a year. “There’s the performing arts, the visual arts … but we’ve also become established as a food economy — dining in the Berkshires is great, for the foodie audience but also the more traditional audiences.

“There’s a farm-to-table component of our economy — there’s a lot of agritourism — and there’s also the recreational economy: hiking, biking, adventure sports, scenic rail, and more,” he went on. “People have always come here for nature and culture, but what’s catching up is the recreational economy and the health and wellness economy.”

But those other parts of the puzzle are equally important, he went on, adding that 1Berkshire is also committed to bringing people here to live, work, and start and grow businesses.

Overall, the agency was conceived as a “better way to do economic development,” said Butler, and to date, the evidence, both qualitative and quantitative in nature, would show that it’s succeeding in that role.

“Over the past 15 to 20 years, the Berkshires have been re-energized, but there are still a number of challenges,” he said, adding that the largest involves ongoing efforts to attract young people and lower the age of the region’s population, a vital component to overall vitality and economic sustainability.

For this issue and its focus on Berkshire County, BusinessWest talked with Butler about 1Berkshire and how it has gone about helping to change the narrative in this unique corner of the Commonwealth.

New Breed of Economic Development

‘The Year of the Dog.’

That was the name attached to the 63rd annual Fall Foliage Parade, staged on Sept. 30 in downtown North Adams. When asked, Butler was more than willing to explain, and started by noting that an elementary-school class in that community has the honor of coming up with a name to accompany the much-anticipated event, which draws thousands to that town.

“This is the Chinese Year of the Dog, and they recently opened a dog museum in North Adams,” he noted, referring to the facility located in the former Quinn’s Paint & Wallpaper Co. on Union Street. “So … it all makes sense.”

There was a huge banner at the top of the 1Berkshire website hyping the parade, he said, adding that the promotional support for such traditional gatherings is just one of many functions carried out by the agency.

There’s also something called simply ‘the jobs thing.’ This is a job-posting site on that same website (1berkshire.com). All positions listed (and there is a fee for such postings) must be for jobs in Berkshire County and come with a salary of at least $40,000. Those doing some browsing can search by field (they range from administrative and clerical to hospitality and tourism to sales and advertising) and by experience (entry-level, mid-level, and senior-level).

1Berkshire also has an events calendar filled with a host of programs, including a youth-leadership program and Berkshire Young Professionals events; a ‘relocation’ button on its website that enables visitors to explore every community from Adams to Windsor; and ‘featured opportunities,’ such as a ‘Get Mentored’ program that pairs selected entrepreneurs with experienced mentors. Applications are being accepted now for the winter session.

“We’ve really changed the narrative around what it’s like to live in the Berkshires. People my age that grew up here, went away, and have had the chance to come back, whether it’s to live here or visit family, are shocked at what they see.”

Then there’s the Berkshire Blueprint, a detailed strategic plan for the region — similar in many ways to the Pioneer Valley Planning Commission’s Plan for Progress — that was first drafted in 2007 and is now being updated.

All of these are examples of how 1Berkshire is carrying out that aforementioned assignment — to find a better way to do economic development, said Butler, who was hired to lead the Berkshire Chamber four years ago, and spent much of the next 18 months working out the merger of the chamber and the convention and visitors bureau into 1Berkshire.

Overall, two years after the all the components of this agency came together, the venture is proving to be much bigger than the sum of its parts.

Going back those four years, he said several of the smaller economic-development-related agencies were doing good work but struggling to keep the doors open financially. Discussions commenced on the many potential benefits from bringing them together under one roof and one administrator, he went on, adding that this somewhat unique economic-development model became reality.

That uniqueness is matched by the region itself, he went on, adding that, while the Berkshires is part of Western Mass., or the 413, as many call it, in many, if not all, respects, it is more than just one of four counties.

“We’re a little bit of our own place,” he explained. “We have our own identity, our own brand. People actually know the Berkshires of Massachusetts on a national level, and even internationally, as a destination. But we’re small — only 135,000 people, with about one-third of them living in Pittsfield.”

That small population is matched by a small economy anchored by a few large employers — General Dynamics and a few banks, for example — and dominated in most ways by tourism.

There are many benefits to living and working in the region, Butler went on, adding that 1Berkshire exists primarily to educate people about them and encourage them to take full advantage of it all.

Right Place, Right Time

To carry out its multi-faceted mission, 1Berskshire, with an annual budget of roughly $2 million, relies on revenue from a number of different streams.

They include membership dues — there are currently about 1,000 members — as well as larger donations from so-called ‘investors,’ major employers such as Berkshire Bank, Greylock Federal Credit Union, and General Dynamics. There is also revenue from website advertisements (a spot hyping a Harry Potter-inspired Halloween party at the Blantyre is among those on the site now), the jobs initiative, and other programs; there are actually two web sites — berkshires.org, the primary visitor portal for the region, and 1berkshire.com.

And there is state money, because the convention and visitors bureau is part of the mix and is funded in part by the Commonwealth, and also because the agency is a regional economic-development council.

As noted earlier, a primary function of the agency is to drive visitation to the region, because tourism has a very broad impact on overall vibrancy in the region.

“With visitation, there is a ripple effect that goes well beyond the traditional visitor-stakeholder economy,” Butler explained. “It has an impact on the quality of our downtowns. We have much more vibrant downtowns today than we did 20 years ago, whether it’s Pittsfield, Lee, or Great Barrington. Those communities have benefited from visitor activity, which has made them a better place to live. It’s had a ripple effect into downtown housing projects, new restaurants and eateries, and things to do.

But there are many other aspects to the mission, he went on, listing everything from advocacy for members to the all-important work aimed at bringing new residents to the area, not just tourists.

Tracing his own career, Butler said that, after earning a graduate degree, he went to work for the Commonwealth in economic development and later for state Sen. Ben Downing in the State House.

He “worked his way back” to the Berkshires, as he put it, and worked as town manager for the city of Adams for six years before becoming director of the chamber.

Now, in his new role, he and his staff are working to encourage others to work their way to the Berkshires, or discover it for the first time, not as a place to leaf-peep or hike or ski — although they can do all of that — but as a place to live.

And this is important work, he said, because so many young people of his generation did in fact leave, in part because so many jobs disappeared, leaving communities demographically older and less vibrant.

But many are returning because what they see now is not the Berkshires of their youth.

“There are so many stories of people who choose, after they get their careers started, to come back to the Berkshires,” he explained. “The dialogue for them when they were kids might have been that they needed to get their college degrees and go off somewhere where there was lots of opportunity and be successful.

“Now, that dialogue is starting to shift to ‘go out, get your degree, experience the world, and why not come back to the Berkshires?’” he went on. “That’s important — that’s really important — and we’re seeing more and more of it.”

Good ‘New’ Days

Getting back to those stories about when the major manufacturers like GE were humming, Butler said they’re getting so old, they’re not really worth telling anymore.

That was a different Berkshires region, and so was the one he grew up with in the ’90s.

The Berkshires of today is not like either of those Berkshires. It is different, vibrant, diverse, and always changing — in short, it’s a different narrative, he explained.

Creating that narrative and making the story known is what 1Berskshire is all about, and four years after its formation, it is thriving in that all-important role.

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

Accounting and Tax Planning

Five Hot Tax Topics

The Tax Cuts and Jobs Act represents a seismic shift within the broad realm of accounting and tax planning, and some of the aftershocks may not be felt, and fully understood, for some time. But some things are known, and individuals and businesses should understand their implications.

By Teresa Judycki

For better or worse, the Tax Cuts and Jobs Act was the most significant tax-law overhaul since the Reagan Administration, and there’s potential for more change on the way. With the breadth and depth of this law, it can be hard to determine what might be meaningful to you and your business.

This article will highlight five hot tax topics that may be particularly meaningful for this tax year.

Qualified Opportunity Funds

Taxpayers with large gains from sales of property to an unrelated person should be aware of Qualified Opportunity Funds. Enacted as part of the Tax Cuts and Jobs Act, a new Opportunity Zone program encourages investment in low-income community businesses.

Terri Judycki, CPA, MST

Terri Judycki, CPA, MST

The program allows individual and corporate taxpayers to defer tax on gains from the sale of stock or other assets by investing in an Opportunity Fund, which invests in businesses in Opportunity Zones. The tax is deferred until the earlier of Dec. 31, 2026 or the date the new investment is sold. To defer a gain, the taxpayer must invest within 180 days of the sale.

For example, if a taxpayer sells appreciated securities for $1 million at a $700,000 gain, tax on the $700,000 could be deferred until Dec. 31, 2026 (or earlier if the investment is sold prior to that date) by investing $700,000 in a Qualified Opportunity Fund within 180 days of sale. Capital gains on the new investment are exempt from tax if the investment is held for more than 10 years. Opportunity Funds may be a multi-investor fund or a single-investor fund established by a taxpayer to invest in projects he or she selects.

While there are a few multi-investor funds, many are hesitant to promise tax deferral until the IRS issues proposed regulations in this area, but September news is that the proposed rules are being reviewed and should be issued soon.

Foreign Accounts

For taxpayers with unreported income from foreign accounts, the Streamlined Filing Procedures (SFP) are still available. The Offshore Voluntary Disclosure Program ended Sept. 28, 2018.

Under SFP, taxpayers who can certify that the failure was non-willful can file amended returns and pay a reduced penalty. The IRS also has procedures in place for filing delinquent information returns reporting the existence of a foreign account when there has been no unreported income.

For example, a life-insurance policy with Sun Life may have a cash value that’s now increased to more than $10,000. That is a ‘foreign account’ that must be reported or could be subject to penalties. Consider reviewing any asset that is a foreign account and ensuring that tax filings are current, because penalties are confiscatory and may include criminal penalties.

The civil penalties for willful violations are capped at the greater of $124,588 or 50% of the amount in the account.

Employee Parking

I hoped to be able to provide you with specifics related to employee parking, but that guidance has not been issued as of the date of this writing. Perhaps there will be guidance by the time you are reading this article.

As a reminder, the Tax Cuts and Jobs Act provides that no deduction is allowed for the expense of a qualified transportation fringe, which includes van pools, transit passes, and qualified parking. Qualified parking is parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work by commuter highway vehicle or carpool. Tax-exempt organizations are subject to tax on the expense. But what is the ‘expense’ of qualified parking? At the 2018 AICPA Not-for-Profit Industry Conference, a speaker said that guidance had not yet been issued, because those in Treasury could not agree on the meaning of the law.

The cost of a parking permit is easy to quantify, but the law encompasses all expenses of providing parking. There are some practitioners who think a portion of depreciation on a parking lot owned by the business could be disallowed. Some others think the IRS may require apportioning office rent if the lease entitles the tenant to a certain number of parking spaces. As the law applies to amounts paid or incurred after Dec. 31, 2017, it affects computation of taxable income for entities with fiscal years ending in 2018. There are many practitioners hoping for retroactive repeal or postponement.

State and Local Tax Itemized Deduction

In August, the IRS issued proposed regulations in response to state legislation intended to circumvent the $10,000 limit on the state and local tax itemized deduction. A few states have enacted or considered enacting programs permitting state residents to make contributions to state agencies or charities in exchange for state and local tax credits that could be applied to income or property taxes.

In the proposed regulations, IRS restates the general rule that charitable deductions must be reduced by anything of value received in return for the charitable donation. The proposed rules, applicable to contributions made after Aug. 27, 2018, provide that, if a taxpayer receives a tax credit in return for a donation, the tax credit is a benefit to the taxpayer that must reduce the charitable contribution deduction.

It is important to note that these rules apply to programs created in response to the Tax Cuts and Jobs Act as well as to pre-existing programs, such as the Massachusetts program that provides tax credits in exchange for gifts of conservation land.

There has been no response from the IRS to the Connecticut strategy; Connecticut now imposes tax on a pass-through entity instead of on the individual partner or shareholder, which should result in shifting the deduction away from the individual who is subject to the $10,000 limit. The shareholder or partner should now be able to report his or her share of the entity’s income net of the state tax.

Trusts that pay taxes are also subject to the $10,000 limit, but a trust does not have to share the beneficiary’s $10,000 limit, providing a potential benefit.

Alimony

Finally, for those who will be divorced soon, the tax consequences of alimony differ for payments under instruments finalized after Dec. 31, 2018.

Before the Tax Cuts and Jobs Act, alimony was deductible by the payor and taxable to the payee. This resulted in shifting income from the higher-earning spouse paying the alimony to the former spouse who may be in a lower tax bracket. Alimony payments finalized after Dec. 31, 2018 will no longer be deductible by the paying spouse and no longer included in the income of the recipient spouse. There are some workarounds such as division of property where the spouse in the lower tax bracket receives property with the greatest unrealized gain or by using a Qualified Domestic Relations Order to shift retirement assets (along with the tax burden) to the lower-income spouse.

While this change will not affect pre-2019 alimony instruments, it may apply if the parties modify the pre-2019 agreement and state in the modification that the new rules are to apply. If this law change will impact you, be sure to discuss its effects with your attorney.

If you have any questions about the material featured in this article or how it might apply to you specifically, be sure to consult your tax professional or CPA.

Terri Judycki is a senior tax manager with Holyoke-based public accounting firm Meyers Brothers Kalicka, P.C.; (413) 322-3510; [email protected]

Home Improvement

Serving Up Style

Karen Belezarian-Tesini (left) and Sarah Rietberg

Karen Belezarian-Tesini (left) and Sarah Rietberg are selling plenty of white and gray tiles these days.

Professional designers can often walk into a house and tell what decade it was built in by the styles of certain rooms, and the kitchen is definitely high on that list. From the high-gloss look of the ’80s to the more neutral ’90s; from a shift back to color at the turn of the Millennium to the current embrace of whites and grays, kitchens do seem to reflect their time. But one trend of the past generation isn’t likely to change — the increased perception of the kitchen as a home’s main hub of activity.

The economy wasn’t the only thing that went flat a decade ago. So did kitchen colors.

“When the economy tanked in 2007, 2008, everything became very flat. Color was gone, along with texture, pattern, flowers. Everything became industrial and cold — no frills. And that’s how the economy was, too,” said Karen Belezarian-Tesini, manager of Best Tile in Springfield. And she’s not the only one who noticed the coinciding trends.

“It’s funny how the economy dictates the colors,” said Frank Nataloni, co-owner of Kitchens & Baths by Curio in Springfield, recalling how many kitchens of the late ’80s featured high-gloss surfaces and plenty of black and red, but when the recession of the early ’90s hit, it was all earth tones. By 2000, color had come back, but around 2008, neutrals took over again. “I don’t know what that means, but when you look back, you can clearly see it.” That decade-ago shift has stuck, however, and even intensified, he added. “Everything now is white and gray.”

While taupe is making a comeback, said Belezarian-Tesini — “I love that more than gray because it gives you an option to go either way, warm or cool” — she’s seen the white-and-gray trend intensify over the years. But better financial times might be causing a subtle style shift.

“Now that the economy is picking back up, it’s getting a little warmer — softer edges, a little more color in glass mosaic or patterns,” she said.

That would be just fine by Lisa Lindgren, designer with Kitchens by Chapdelaine in East Longmeadow.

“The most popular kitchen is white — white on white. So whenever I get a client who wants some color and wants to do something a little different, I get excited,” she told BusinessWest. “People tend to be so scared of color. A lot of it is about sellability, but we tend to encourage people to go for what you like. It’s your house.”

Frank Nataloni

Frank Nataloni says styles shifted away from bold colors when the economy tanked, and have largely remained muted since.

R.J. Chapdelaine, owner of the company, an offshoot of builder and remodeling firm Joseph Chapdelaine & Sons, agreed.

“Whenever you have someone who comes in with a little imagination, wants to have a little fun, it gets exciting,” he said. “And why not? That’s where people want to spend their time. Kitchens are getting bigger, and other living spaces are getting a little bit smaller.”

For this issue’s focus on home improvement, BusinessWest visited a few companies that deal in kitchen design to get a read on some of the hot styles — only to find that the hottest is a decidedly cool white. But they offered plenty of other food for thought as well.

What’s Your Style?

Take countertops, for instance, where white- and gray-colored quartz surfaces are in, both Lindgren and Nataloni said.

But they’ll find contrast in other places, Lindgren noted, like weathered driftwood for accent pieces or a dark wood floor — or, more commonly these days, porcelain planks designed to look exactly like wood. “That’s the most popular floor. You can’t even tell it’s not wood. It’s pretty fascinating.”

“That seems to be what everyone’s looking for right now,” Nataloni added. “With some of them, it’s amazing how much it actually looks like real wood. You can even feel the texture. That’s what people are looking for.”

And homeowners aren’t stopping in the kitchen, Belezarian-Tesini said. “When I sell those planks, I might sell 2,000-3,000 square feet at a time. They’re doing their bedrooms, they’re doing the whole house. It’s just incredible. People say, ‘oh my gosh, I love that,’ and when we tell them that it’s porcelain, they look again and say, ‘are you sure? Really?’ ‘Yeah, really.’”

In addition to the move away from tile floors into wood and wood-like porcelain, Chapdelaine noted that shiplap walls — in both vertical and horizontal patterns — are popular as well, perhaps driven by their ubiquitousness on HGTV.

As for cabinetry, while painted white tops the list right now, Nataloni said, he was working with someone recently who wants a black cabinet with a rubbed-off type of finish so there’s some wood coming through. Still, those neutral shades provide plenty of flexibility.

R.J. Chapdelaine and Lisa Lindgren say it’s fun to work with customers who have a design vision not necessarily bound by what’s currently fashionable.

R.J. Chapdelaine and Lisa Lindgren say it’s fun to work with customers who have a design vision not necessarily bound by what’s currently fashionable.

“With a white or gray cabinet, we can make it look very formal or casual in the scheme of things,” he said. “I haven’t sold a cherry kitchen in over a year, but at one time, that was probably 60% of our business. Some woods remain relatively popular, though, including walnut. “That’s the fashion part of the business, and it changes depending on who walks through the door.”

Sarah Rietberg, showroom manager at Best Tile, said all these trends amount to people seeking a clean, uncluttered look in their kitchens, which is why subway-style tile backsplashes are still common, but with a twist — different sizes, something with a little texture to it, or even lines that aren’t perfectly straight.

“Those things can add some oomph to subway tile,” she said. “People want a little movement, but nothing too crazy. They don’t want to take away from the other things going on.”

In addition, a well-placed accent color can be striking amid a sea of white, Chapdelaine said. “We just did one all-white kitchen with a hale navy blue island, and it’s a striking look.”

Indeed, Belezarian-Tesini said, many customers complement the dominance of white and gray with mosaic tile backsplashes; where once a mosaic pattern broke up the solid color of the rest of the backsplash, now it’s being used across the entire backsplash to break up the white of the kitchen.

Sometimes it’s hard to predict the next trend, she added. “If you asked me 10 years ago if glass would still be here, I’d have said no, but glass is hotter than it’s ever been. It’s the medium of choice now. People still use ceramic, and porcelain has really come up the ladder. But glass has become the decorative. It’s a 10-year trend for sure, and it’s probably going to last longer than that.”

Meanwhile, she sees metallic tile coming into its own. “As technology gets better, you’re going to see more things within the glazing. You’re even seeing crystals in the glazing, little pieces of metal, to create a true, realistic metallic. So technology advances, and the tile changes.”

Good, Better, Best

The upside of so many options in kitchen surfaces is that there’s typically something for every budget, Nataloni said.

“We have to have a good, better, and best product selection,” he told BusinessWest. “We have a product for people flipping homes that’s very current with the trends, reasonably priced, good quality, with a quick turnaround time. Then we have a semi-custom type of product that offers a lot of selection and is a little quicker than the higher-end product. That means a lot if someone is doing a home renovation, because a kitchen is not an inexpensive proposition. If you know where to save money, you can get more bang for your buck, and that’s our skill.”

Some customers arrived with a vision in mind for their kitchen, he explained, and his job is to refine it. “Then there are other people who come in and don’t have a vision, and they’re looking for me to help them create the vision. That’s why we have to be flexible in meeting the need of whoever is coming to us.”

To help people envision the end product — quite literally — Nataloni uses a virtual-reality device called ProKitchen Oculus, which uses Oculus VR goggles to allow people to walk around in the environment Nataloni has programmed into the computer.

“For people who have a hard time visualizing, it really solves that problem for them,” he said. “We create a basic floor plan in 3D, and you’re actually in the room, so you can look and walk around. They literally see what they’re going to buy, or as close as possible to what it’s going to be like.”

For example, one customer was having trouble envisioning the soffit Nataloni suggested for the top of their cabinets. “Then I showed it to them on the Oculus, and their response was, ‘oh, now I understand what you were talking about.’ For those type of people, it really helps tremendously.”

Chapdelaine also sees a healthy mix — about 50-50 — of people who know exactly what they want and customers who need a little more guidance. “And that guidance can occur through Lisa, or through decorators. We see clients occasionally bring in a decorator to help them make decisions on color, cabinetry, and tile.

Most of those are typically renovating their whole house, Lindgren added. “It doesn’t tend to happen just with a kitchen, but with a broader scope.”

Whole-home renovations are common these days, said Chapdelaine, who noted that the remodeling business has been outpacing new home building for some time. His grandfather, who first hung out a shingle in 1925, saw the value of remodeling work early on, and evolved the firm in that direction after originally focusing on new construction.

“That became an integral part of our business,” he said. “You have to evolve. I see people who just build houses or just remodel, and I’d find that difficult. You can go from building three, four, five houses at a time to building one or maybe none, and doing all remodeling.”

Open Wide

He and Chapdelaine’s father also recognized perhaps the most prominent shift in kitchen design, and one that remains dominant today — the open floor plan.

“They were building compartmentalized houses, but they rolled into a more open floor plan on the single-story executive ranches,” he recalled. “Now, there’s very little compartmentalized building. Everything is wide open, with less formal living spaces.”

Nataloni said homeowners prefer a free flow of traffic through the kitchen, and islands are desirable if they can be put in. “Gone are the days of the U-shaped kitchen or a peninsula only, unless it’s necessary. Everyone is looking to have cabinetry that creates the outside shell of the kitchen and then some kind of an island in the middle, whether it’s with seating or without.”

That’s also the style potential homebuyers prefer when they’re visiting open houses, which is one reason why hot trends — like that white and gray — remain so dominant once they take hold; people design the room not only for their own comfort, but with resale in mind.

“For many people, this is where they’re staying, but we do have a lot of people coming in saying, ‘look, I want to fix up the kitchen, and we’re not going to be here forever, so I want it saleable,’” he noted. “We get probably more of the people who are staying for the foreseeable future, and they want to enjoy it. That’s the majority of our business.

Belezarian-Tesini said most of her business at Best Tile contractor-driven — either builders putting up or remodeling houses, or homeowners shopping for product, then hiring a professional to do the work. The do-it-yourself crowd is much smaller — perhaps because the kitchen is such a critical part of 21st-century home life that people don’t want to get it wrong.

That said, “business has been fantastic,” she noted. “I’ve seen a lot of new construction over the last few years. When I started here 23 years ago, it was all new building. Then it went to remodeling, and now it’s coming back again to new construction, which is nice to see.”

So, for the foreseeable future, she’ll continue to track the design trends and help customers design the kitchen of their dreams — usually with an open concept.

“It makes for easy living, and really great entertaining,” she said. “After all, the kitchen is the heart of the home.”

Joseph Bednar can be reached at [email protected]