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Hire Ground?

 

For months now, business owners and elected officials have pinned the region’s mounting labor woes and all those ‘help wanted’ signs on too-generous federal unemployment assistance. Now that those benefits have expired for more than 3 million Americans, we’ll soon find out just how much of a factor those benefits were. Many involved in economic development and workforce matters say the problem has much deeper roots and that it might be some time before there is a return to anything approaching normal — whatever that is.

 

Dave Gadaire says considerable thought went into the timing of the massive, statewide job fair he helped coordinate last month.

Indeed, he said the week-long virtual gathering, said to be the largest such event ever staged, was scheduled for a time when employers across every sector of the economy were struggling to fill vacancies, often to the point where it was impacting productivity, if not profits — and when large numbers of individuals would be staring down the loss of federal unemployment benefits (specifically those weekly $300 bonus checks) in less than a month.

The thinking was that the convergence of these factors would create a sense of urgency and that the foundation would be laid for some good matches between employers and job seekers at this job fair.

And while that happened, and all those involved with the job fair, from the governor on down, have declared it a success, there are certainly question marks as to just how many matches will be made and whether this event will put a dent in a labor shortage that is, by all accounts, without precedent.

In many ways, the job fair, and the uncertainty concerning the bottom-line results from it, are a microcosm of what’s happening with the job market here and elsewhere, said Gadaire, president and CEO of MassHire Holyoke Career Center. The ongoing plight of employers seeking help and the end of those federal benefits would, logically, seem to indicate that jobs are going to be filled — probably sooner than later.

Rick Sullivan

Rick Sullivan

“States that ceased the incentive on their unemployment earlier have not seen huge upticks in labor participation. But we’ll see what happens; we certainly think some people will enter the workforce when the benefit goes away.”

But more evidence is indicating this is not going to be the easy fix that some employers and many elected officials — people who have been pinning the ‘workforce crisis,’ as it’s called, on an over-generous federal government — thought it would be.

Rick Sullivan, president and CEO of the Western Massachusetts Economic Development Council (EDC), told BusinessWest that data and anecdotal evidence from states that did away with the federal bonus checks months ago indicate this has not been the cure most thought it would be.

“States that ceased the incentive on their unemployment earlier have not seen huge upticks in labor participation,” he noted. “But we’ll see what happens; we certainly think some people will enter the workforce when the benefit goes away.”

He was quick to note, however, that he has heard from some of his members that, through smaller, more-targeted job fairs and other recruiting efforts, they are seeing an uptick in the numbers of applications and hirings. Still, he said far more evidence is needed to get a real grasp of what’s happening with the labor market, let alone project what will happen over the next few quarters and beyond.

Kevin Lynn, president and CEO of MassHire Springfield Career Center, agreed. “Murky” was the word he used repeatedly to describe the future of the jobs market in this region.

“This whole thing is not new. We’ve been hanging this lack of applicants on COVID and the unemployment situation. But if you go back to, let’s say July through December of 2019, all you heard from companies was that they had no applicants, and when they did have an applicant, they were being ghosted — ghosting became the new term.”

“It’s an incredibly murky time, because it’s all unprecedented,” he explained. “And there are so any variables. This is not a recession, it’s a healthcare crisis, and it’s been like a rollercoaster; we seem to be on a rollercoaster going down again, and that does not play well psychologically.”

Lynn went further and said that, while the problems and frustrations currently being experienced by area employers may be heightened by the pandemic and factors related to it — childcare shortages, fear of returning to the office, mass retirements, and an unwillingness to work for low wages (he and others would get into all those) — in many ways, it’s all simply a continuation of what was happening before the pandemic.

“This whole thing is not new,” he said. “We’ve been hanging this lack of applicants on COVID and the unemployment situation. But if you go back to, let’s say July through December of 2019, all you heard from companies was that they had no applicants, and when they did have an applicant, they were being ghosted — ghosting became the new term.

“Companies were having major recruiting problems prior to COVID,” he went on. “What we’re seeing is nothing new.”

For this issue, BusinessWest talked with several area economic-development leaders about the workforce crisis and the murkiness that surrounds just what will come next.

 

Food for Thought

Lynn told BusinessWest he was in Boston over Labor Day weekend. During his time there, he had an experience at a restaurant that was eye-opening if not frightening — a hard look at how things are for employers, especially in hospitality, and how they might — that’s might — continue to be.

“There were 15 tables there, and one woman was waiting on all 15 tables — I couldn’t believe it,” he said, using exasperation in his voice to add an exclamation point. “She was hustling, and I mean hustling. They had one woman on the tables, they had one person busing, and they had a bartender — I don’t know how many they had in the kitchen. The food was coming out, and she was hustling.”

Nancy Creed

Nancy Creed

“It’s such a competitive market, and it’s so hard to find talent that … you may hire some great talent, and two weeks later another company scoops them from you. And there is no employee loyalty.”

While that situation represents an extreme, it encapsulates what many employers are facing these days — an inability to staff up in the manner they want and need, often in ways that impact service, the customer experience, and, in many cases, the bottom line.

In Western Mass. and many other regions, print shops have been working overtime filling orders for ‘Help Wanted,’ ‘We’re Hiring,’ and ‘Join Our Team’ signs. Meanwhile, other signs get far more specific, listing benefits as well as as wage scales and sign-on bonuses. Meanwhile, most restaurants in the region have cut back days of operation and closed portions of their establishments, school systems struggle to hire bus drivers, and healthcare providers tussle with one another to find nurses and other professionals.

And the fight certainly doesn’t end when the person is hired, said Nancy Creed, executive director the Springfield Regional Chamber, adding that loyalty among employees is a thing of the past, and retention is every bit as challenging as hiring.

“It’s such a competitive market, and it’s so hard to find talent that … you may hire some great talent, and two weeks later another company scoops them from you,” she noted. “And there is no employee loyalty.”

The questions on the minds of everyone in business and economic development concern just when, and to what extent, the pendulum will swing back in the direction of an employers’ labor market.

And the answer is a universal ‘I don’t know … we’ll have to wait and see,’ or words to that effect.

While the massive virtual job fair didn’t provide any hard answers to what’s ahead, neither did the most recent jobs report, which was a headscratcher to most analysts; only 235,000 jobs were added in August, the lowest number since January, following expectations for three times that number.

Getting back to the job fair, it was large in every respect, said Gadaire, who broke down the numbers. The event drew more than 1,700 employers from across the state and across all sectors of the economy, and 17,264 job seekers. Over the course of week, 21,046 résumés were exchanged, and there were nearly 1.4 million virtual visits to the companies’ booths.

While those totals are all impressive, they will not ultimately define how successful this event was, he went on, because the numbers that really count concern the number of jobs to be added in the weeks and months to come.

“We felt we at least got some mass when it comes to what we were trying to do,” said Gadaire. “What we’re doing now is doing all the follow-up to find out how much of that turned into job offers and hires; we’re getting that information back from the companies now as we speak, and it looks like a pretty successful event.”

Time will tell, obviously, and there are a number of factors that will ultimately determine how much of a dent will be put in the state’s labor crisis.

Indeed, those we spoke with said the federal unemployment benefits were certainly a contributor to the deepening of the labor shortage that’s been witnessed over the past year and especially the past nine months. But it appears it’s not as big a factor as many thought, and in the meantime, there are many other factors.

Childcare, or a lack thereof, is a huge issue, said Creed, noting that many working parents — or parents who were working, especially single mothers — cannot return to the workplace without childcare, which is suffering from its own workforce crisis and other issues. Fear of COVID is another factor, she added, noting that the recent surge in cases spawned by the Delta variant will, in all likelihood, slow any kind of return to something approaching normalcy when it comes to the labor market.

“There are three large contributors — the federal stimulus, childcare, and the virus itself,” Creed said. “They all play a role to some degree within specific demographics and populations, and we just need to give it some time to play out and see what happens.”

 

Money Talks

Which leads to another question: just what constitutes normal these days?

Is normal what was seen in 2019, as described by Lynn and others? Is normal what existed a decade or more ago when unemployment was low, yet candidates were far more plentiful?

More to the point, what will be … wait for it … the new normal? And what do employers have to be thinking about as they try to navigate that new normal?

That’s a lot of questions, many of them without easy answers.

Indeed, as a result of the labor shortage of the past several months, wage inflation has become a matter to contend with, and it is one of many factors keeping matches from being made.

“Job seekers have realized that they’re in a bit of a buyer’s market right now,” Gadaire said. “They are in high demand, so they’re asking for higher wages than what most companies are offering or can offer, and that’s certainly a problem.”

Creed agreed. “Not every business can afford to pay $40 an hour,” she noted. “So when you hire someone, and they get pennies more at another company, they’re going to switch; it creates a wage competition that small businesses just can’t afford.

“A lot of these businesses already have very thin margins — so there’s not a lot of wiggle room,” she went on, adding that budget concerns are further compounded by unemployment-insurance issues, paid family leave, hiring incentives and bonuses, and more.

Also, the surge in the pandemic has brought a whole new level of concern, as some people are afraid to enter the workforce, Gadaire noted. “A few months ago, I thought that problem was going away, but now, here we are again.

“And that has the ripple effects attached to it, like childcare and transportation,” he went on. “And then there’s the very real onset of people realizing, and businesses realizing, that remote work is now not just a luxury, it’s a reality, and people are redefining how they do work.”

For some companies, he explained, especially those in hospitality or the broad service sector where workers are face to face with customers, remote work is simply not an option. But for those where it is an option … those companies should look long and hard at creating such remote-work opportunities because doing so will greatly increase the amount of talent available to them.

Creed said the companies may also need to rethink how they hire and whom they hire moving forward.

“Does that position really need a four-year degree? Can it be a two-year degree, or a certificate, or just a GED?” she asked rhetorically, while noting just one way companies may be able to widen the pool of applicants for a job. “We need to rethink our recruitment practices, which is something we’ve always talked about, but now, I think you have to start digging deep into your workforce and saying, ‘how can I adjust?’”

While companies have to be creative and innovative, so too does the region, said Sullivan, adding that a new ‘job trail,’ created by the Greater Springfield Convention & Visitors Bureau and supported by the EDC, is one such example.

On Sept. 8 and 15, participating businesses throughout this region put out signage and orange and blue balloons to identify the ‘trail.’ Interested applicants could visit those businesses, fill out an application, and perhaps schedule an interview (participating companies were required to have people on site to handle inquiries during designated hours).

“There’s a focus on restaurant and hospitality jobs, but we have Yankee Candle, United Personnel, Big Y, Monson Savings Bank … we’ve had a really good response,” he said. “It’s a good cross-section of jobs, and the timing of it is not incidental — we appreciate the fact that the unemployment benefits are running out.”

 

The Job at Hand

As with so much else with this evolving story, time will tell regarding how effective outreaches like the job trail have been when it comes to easing what has become a historically challenging labor market for employers.

For months, experts have speculated about why so many jobs have gone unfilled when so many people are out of work and supposedly looking for work. The federal unemployment benefits were presumed to be the main culprit, but as the weeks and months go by, it’s becoming clear that there is far more to this story. And, as Lynn and others noted, what’s going on is really a continuation, and perhaps an escalation, of what was already happening before the pandemic.

Answers to this crisis have been slow to emerge, and the hope is that, in the weeks and months to come, matters will become more clear and the pendulum will finally begin to swing back.

 

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

Insurance Special Coverage

Rising Tide

After a summer of heavy rains in Massachusetts — and across the Northeast, for that matter — plenty of homeowners discovered their insurance policies don’t cover flood damage, and many are no doubt considering whether they should add such coverage. And it’s a question that may be raised even more often in the future, as climate change produces stronger and more frequent storms.

Last week, President Biden sat with state government officials to talk about the growing dangers of hurricanes and floods.

“For decades, scientists have warned that extreme weather would be more extreme and climate change was here. And we’re living through it now,” he said. “We don’t have any more time.”

But it wasn’t Florida he was visiting, or Louisiana or Mississippi. It was New Jersey, which had just experienced, according to one county commissioner, its fourth 100-year storm in the past two decades. The event turned tragic, with close to 40 people dead in New Jersey and New York, many trapped in basements and cars.

In other words, the effects of climate change on storms is no longer a problem for other regions. It’s a problem for the Northeast, too.

And it’s on the minds of those in the insurance industry.

“What was once a 100-year flood is now a 10-year flood,” said Trish Vassallo, director of Operations at Encharter Insurance in Amherst. “We’re seeing things now that we never anticipated.”

Trish Vassallo

Trish Vassallo

“What was once a 100-year flood is now a 10-year flood. We’re seeing things now that we never anticipated.”

Western Mass. residents know this well after a summer of often-incessant rain, punctuated by a few big storms that left a trail of flooded basements in their wake — most of which were not covered by insurance. But it doesn’t have to be that way.

“A homeowners’ policy is going to provide coverage for a hurricane or tornado — which is on everyone’s mind this time of year,” Vassallo said. “We’re covering for wind damage and hail. If the whole house blows away, we’re covering for that as well.

“But flooding is always going to be excluded,” she went on. “You need to purchase a specific flood policy. The basic policy is from the ground up — not the flood coming in from the surface.”

There are two types of coverage homeowners can add to their policy to cover floods, Vassallo noted. Flood insurance covers water damage that results from water that has already hit the ground, pouring in from oversaturated yards, flooded streets, or overflowing rivers, streams, or ponds. Meanwhile, water backup coverage reimburses the homeowner for water that backs into the home through an outside sewer or drain.

“The key phrase is surface and/or groundwater coming into the building,” said David Griffin Jr. senior vice president at the Dowd Agencies in Holyoke. “If a pipe bursts, causing water damage, or water gets in through the roof, or a tree falls through the house and water comes in behind it, that’s all covered [by a basic policy]. But if water from outside the home comes in — if the yard floods and starts to spill into the basement — you’ll need a flood policy to respond to that.”

David Griffin Jr.

David Griffin Jr.

“We’ve had so much water this summer — it’s unprecedented, and it’s becoming an issue for everybody.”

While add-ons like earthquake insurance don’t sell big in New England for a reason, flood insurance is becoming an “absolute necessity,” Vassallo said, noting that it’s required in Massachusetts for mortgages in designated flood zones. “A person no longer has the option; mortgages require it. You can’t close on a loan without it.”

Griffin said his team recently ran some numbers and found that only 3.5% of all homeowners in Massachusetts have a flooding policy. Considering that flood-zone requirement, the percentage of people who aren’t forced to buy the coverage but opt for it anyway is strikingly low.

Will a summer of heavy rain — or talk of more intense storms in the future — change that? Insurance professionals are watching closely.

 

A Disconnect?

While flooding from rushing water and rain is generally not covered by regular homeowners’ insurance policies, floods remain the most common and most destructive natural disaster in the U.S., according to the National Assoc. of Insurance Commissioners.

From 1988 through 2017, flood damage in the U.S. cost almost $200 billion, according to the Natural Academy of Sciences, and the increase in precipitation due partly to climate change was responsible for $73 billion, or more than a third of that, Investopedia reported this month. These figures include all property damage, not just homes.

Nonetheless, only about 15% of homes in the U.S. are insured against floods, according to both a report from the reinsurance company Swiss Re and a survey by the Insurance Information Institute.

Dowd said homeowners should take a five- to 10-year perspective on what potential flood damage would actually cost. “Do I want to spend 800 bucks a year on a flood-insurance policy? Over 10 years, that’s $8,000. What’s the likelihood of having a loss beyond that if I have to self-insure? You can look at insurance as a long-term budget item.”

Consumers can access a cost estimator, where they can input data about their home, including its age, location, construction style, square footage, and contents, and get back replacement-cost numbers that can help guide policy decisions, Dowd said.

And current events may affect that formula; these days, in the case of major, widespread damage, homeowners may run into supply-chain issues and shortages of wood and other materials, which can significantly jack up costs.

“If you haven’t looked at your limits in a while and they’re $325,000 and it actually costs $425,000 to replace it, you don’t want that kind of gap in case of a total loss,” he noted. “It’s important to be on top of that.”

But protecting a home from water damage — or any other disaster — extends beyond the policy itself, Vassallo said.

“We talk about preparedness — making sure people do the right thing to limit their losses,” she noted, which includes everything from securing movable items to cutting back tree branches that threaten windows and roofs. “This is something we deal with on a day-to-day basis here in New England. You want to limit your damage as a homeowner.

Griffin agreed. “There’s always a level of preparedness you need to have in order to limit damages in a storm. That’s something you want to think about — it can sometimes eliminate bad things.”

Meanwhile, after an incident occurs, the homeowner can take steps to minimize further damage while documenting their losses.

“Always take photos of loss of everything, and make immediate emergency repairs — put that blue tarp on the roof to prevent rain damage,” Vassallo said. “If you do need to make emergency repairs, most insurance companies will honor the photographs. I would recommend you retain damaged materials, which can prevent questions from arising. If you rip out the rug in the house, you don’t want the adjuster to pay you for builder’s grade, when you had a high-grade rug. That’s stuff we deal with all the time.”

The homeowner is expected to not just respond quickly to minimize damage, but to help prevent it as well, she noted. That means regularly cleaning gutters so they’re not backed up with leaves during heavy summer rains, which can lead to water pouring into the foundation and leaking into the basement — or contributing to ice dams in the winter.

In other words, “if you have gutters, clean them — but be careful on that ladder,” Vassallo said. “If you can do your preventive work ahead of time, you’re ahead of the game.”

 

Warning Signs

As he noted earlier, flooding has been on Griffin’s mind lately.

“Typically, this is the time of year when we see the biggest uptick in those types of claims, especially in New England,” he said. “We also see it in March, when the ground is frozen, and we may get two or three inches of rain, which slides across the frozen ground and into your home. But we’ve had so much water this summer — it’s unprecedented, and it’s becoming an issue for everybody.”

He said carriers have been sounding the alarm about this topic. “Storms are getting a lot stronger. It’s definitely something that’s been noted on the carriers’ end.”

They’re not alone, of course.

“Every part of the country is getting hit by extreme weather. And we’re now living in real time what the country’s going to look like,” Biden said in New Jersey last week. “We can’t turn it back very much, but we can prevent it from getting worse.”

And make sure we’re properly insured against the next big storm.

 

Joseph Bednar can be reached at [email protected]

Berkshire County Special Coverage

Walking the Walk

Mindy Miraglia was inspired to launch Berkshire Camino by her treks in Northern Spain.

The COVID-19 pandemic has provided many individuals with the motivation, opportunity, and time to pursue their entrepreneurial dreams. That’s certainly been the case in the Berkshires, where new ventures launched, or set to be launched, include a new brewery, a guided-hikes venture, and a treasure-hunt concept that introduces consumers to area businesses.

Like most of those people who find themselves walking the Camino de Santiago — the pilgrim trail (actually, several different trails) that end at the Spanish city of Santiago de Compostela — Mindy Miraglia was at a crossroads in her life.

Indeed, after many years in advertising and market research, subsequent burnout, and some time working at the Kripalu Center for Yoga and Health that didn’t end well, she was trying to figure out what could — and should — come next for her.

So, like hundreds of thousands of people each year, she decided to walk the Camino, also known as the Way of St. James, to pause, reflect, and maybe, just maybe, find an answer to her question. And as she tells the story, the Camino — and, specifically, her experiences on the 250-mile trek across Northern Spain — became the answer.

Sort of. Let’s just say it’s a work or progress. Or a business in progress.

It’s called Berkshire Camino LLC, which specializes in guided hikes through the Berkshires, many of which take people from community to community and are thus patterned after what Miraglia experienced in Spain on her two treks on the Camino.

“If you want to get romantic about it … we felt that there was never going to be a better sign from God that it was time to make a change.”

But that was not the original plan. Instead, she wanted to create hostels — the lower-cost, dorm-like hotels that are an important part of the Camino experience — in the Berkshires and thus bring a different type of accommodation for tourists to that market. But reality, in the form of skyrocketing real-estate prices, as well as a lack of capital and few options for obtaining it, has kept that dream in check — at least for now.

But Miraglia, at the advice of mentors assigned to her by the nonprofit EforAll Berkshires, has pivoted and now leads a number of guided hikes within the Berkshires through a venture that is not yet profitable but showing some forms of promise.

Overall, she can find countless ways, and phrases, to compare the rugged challenge that is the Camino to that of starting and growing a business.

Mike Dell’Aquila and Sara Real

Mike Dell’Aquila and Sara Real found the inspiration, and the time, to launch Hot Plate Brewing during the first year of the pandemic.

“It’s a hero’s journey,” she said of the trek in Spain, but also entrepreneurship. “You put yourself onto that path, and you have to overcome challenges and see who you are.”

Miraglia is part of what many are calling a surge in entrepreneurship in the Berkshires, one fueled in part by the pandemic, which left many out of work and looking to start their own business. It left others wanting to leave the city and head for far more rural areas — and, again, start their own business. For still others, the pandemic triggered imaginative ideas for ways to get people out and about, and generate revenue while doing so.

Mike Dell’Aquila and his wife, Sara Real, don’t fit neatly into any of those categories, but in some ways, they encompass all three. They left their condo in Brooklyn for a home in Lenox in July, and are advancing plans to launch Hot Plate Brewing Co. in Pittsfield.

As with all breweries, there’s a story behind the name; in this case, the couple lost gas service in their condo for a period of time just as they were getting serious about transforming this from a hobby to a business. So they famously bought a hotplate so they could continue honing their craft.

There’s more to this story than the name, though, said Dell’Aquila, adding that the pandemic certainly helped provide the motivation — and the time — to take their dream, which has been, well, brewing since 2018, off the drawing board.

“If you want to get romantic about it … we felt that there was never going to be a better sign from God that it was time to make a change,” he told BusinessWest, adding that he and Real were both working day jobs, from home, during the pandemic. Motivated by this ‘sign’ from above, they used the extra hour and half they gained each day from not commuting, as well as Zoom technology, to advance their concept.

They are closing in on a location for their venture and plan to start brewing beer by early next year.

As for Liam Gorman, the pandemic certainly helped inspire his venture, CozQuest, which he bills as “the new way to explore the Berkshires.” It’s a local treasure hunt, as he called it, one that connects consumers and businesses “through their love of community and adventure.”

“The overall demand for services in the tourism and hospitality sector hasn’t changed a lot, and because of that, it’s created opportunities for entrepreneurs to make a run at whatever they wanted to do. We have seen a lot of that kind of activity.”

Using their phones, players solve a puzzle, follow a map, and find and scan a QR code to win a prize from a local business. If a player finds all the prizes, he or she can win some cash. German has created a number of these hunts, in cities and attractions such as Hancock Shaker Village and MASS MoCA, and says the business has developed a loyal following among both players and sponsoring businesses. His plan is to expand the concept and perhaps take it to other markets.

These entrepreneurs and many others are part of an emerging story in the Berkshires. It’s about people finding entrepreneurial energy during the pandemic — and finding ways to harness it.

 

It’s No Walk in the Park

As she goes about trying to grow her venture, Miraglia says there are times when she will actually tell herself that she’s “on the Camino.”

By that, she meant she’s on an arduous journey, one where you’re just trying to get to the next day and really don’t know what’s around the next bend.

“It’s hard,” she said, using that phrase to describe both the Camino and entrepreneurship, which has tested her in every way imaginable.

Indeed, while her concept has drawn interest from adventure seekers across the country and even other countries — not to mention a significant amount of press locally — there have been countless challenges to overcome. These include everything from the weather, which has canceled many hikes, to lingering anxiety about gathering in, or even walking in, large groups, to lingering anxiety about how to generate revenue in the winter months.

Liam Gorman, seen here with his children

Liam Gorman, seen here with his children, believes he’s found a scalable venture in CozQuest.

“I’ve had to refund 15% of my deposits so far because of the weather,” said Miraglia as she referenced a spring and summer of almost incessant rain, adding that these seasons have been challenging enough; winter is a matter that will be decided another day.

Meanwhile, Dell’Aquila, while obviously confident and enthusiastic about his venture, was quite candid about his leap from a steady paycheck to the uncertainty of entrepreneurship.

“It’s definitely terrifying,” he noted. “I vacillate from being super-excited to being super-scared.”

By all accounts, there are more people experiencing these mood swings in the Berkshires these days.

Deb Gallant, executive director of EforAll Berkshire, told BusinessWest that the agency, part of a larger, statewide network that also includes an office in Holyoke, staged its first accelerator program just before COVID-19 arrived in the winter of 2020; it had eight participating businesses. The agency then saw a considerable uptick in applications for the next few cohorts, at the height of COVID, and for all the reasons mentioned above.

“We were really able to spend the quality time needed to put together a business plan, to work on the financial forecast, and do all of that upfront work, so that you’re not just a home brewer with a dream.”

“A lot of people were unemployed, especially those in hospitality,” she explained, noting that many large employers in that sector, such as Canyon Ranch, Kripalu, and others, shut down or curtailed operations. “We had a huge uptick in applications for the next two cohorts.”

The number of applications declined somewhat for the upcoming fall cohort, which she attributes to improved stability at many of those businesses that had shut down partially or completely during the pandemic. But the agency will still have a large cohort, said Gallant, adding there is still a good amount of entrepreneurial activity in this region, which has been reinventing itself for the past 30 years from an economy dominated by manufacturing, and especially General Electric’s massive transformer complex in Pittsfield, to one that is far more diverse and driven in many ways by tourism, hospitality, and the arts.

Jonathan Butler, executive director of 1Berkshire, a multi-faceted economic-development agency, agreed.

From the early days of the pandemic, he noted, he could sense that, while COVID would bring a wide range of challenges to the region, it would also provide some opportunities for the Berkshires as well.

They have come in all forms, he went on, from professionals relocating to the area from urban centers, a migration certainly helped by the growing success of remote working and one that is prompting population growth in cities and towns that have needed such a surge, to an unparalleled explosion in the real-estate market, which has created opportunities and challenges of its own.

And, as noted, COVID has prompted a surge in entrepreneurship, said Butler, adding that it involves both new owners of businesses that failed during the pandemic — there were many, especially in the broad hospitality realm — and a wide range of new businesses as well, many of them fueled by an even greater interest in visiting the area and taking in many types of attractions.

“The overall demand for services in the tourism and hospitality sector hasn’t changed a lot, and because of that, it’s created opportunities for entrepreneurs to make a run at whatever they wanted to do,” he explained. “We have seen a lot of that kind of activity.”

 

Something’s Brewing

For Dell’Aquila, it wasn’t really a matter of whether he and Real would launch their brewery operation. The questions were when and where they would launch.

And COVID helped answer both, but especially the former, he said, adding that it provided the time and impetus to move ahead with their plans. “We were really able to spend the quality time needed to put together a business plan, to work on the financial forecast, and do all of that upfront work, so that you’re not just a home brewer with a dream.”

Now, he and Real are home brewers with firm plans and, hopefully, a location. They are finalizing commitments for investing in their venture from friends and family, exploring possible incentives from local and state sources, and meeting with architects to finalize blueprints for their operation. They also have a slot in the next accelerator cohort for EforAll Berkshire, during which they hope to gain both a better understanding of the local business landscape and garner more feedback and mentoring on their plans and their brand, which they believe will be a solid addition to the local craft-beer landscape.

He said he and Real will bring what he called a “culinary approach” to brewing, with such as offerings as a chamomile-infused blonde ale and a Jalapeno pale ale, in addition to more traditional stalwarts such as Belgian-style farmhouse beers, some classic American pale ales, and an IPA.

Dell’Aquila acknowledged that the Berkshires were already home to a number of solid craft-beer labels, but there is room for more — and more, in his view, creates opportunities for both himself and others.

Indeed, with Barrington Brewery in Great Barrington, Bright Ideas Brewing in North Adams, Shire Breu-Hous in Dalton, and others, the addition of Hot Plate in Pittsfield boosts the potential for what Dell’Aquila called a “beer trail” from the southern part of the county to the northern region.

“One of the things we found when we were really digging in is that there is a lot of excitement and desire for craft beer,” he explained. “And adding more options will only help; to me, density is a good thing.”

While Hot Plate is preparing to launch, CozQuest is looking to build on a solid first year and explore a number of possible growth opportunities, said Gorman, who brings a varied background to his venture. Originally in journalism, he moved to Los Angeles and ventured into television.

After relocating to the Berkshires five years ago in a search for a more stable environment in which to raise children, he became part-owner of the bar Thistle and Mirth and helped reverse its sagging fortunes. He sold his share just prior to COVID’s arrival in the region, and used some of that windfall to start CozQuest, which is in many ways inspired by geocaching, a type of global treasure hunt where seekers use GPS devices to find hidden caches.

“The engagement level has been pretty high; I like to call CozQuest a foot-traffic-building machine,” he told BusinessWest. “It brings people to places they might otherwise not have known about to discover and explore.”

German was a participant in the spring cohort of 2020, and said the experience of working with mentors and other local business owners gave him the confidence to move ahead with the concept, which is currently in what he calls phase 1, where he’s honing the concept and gauging its revenue potential.

The plan is to scale up in all ways, starting with the website, which he built himself. “It looks like someone’s first website, but … it works,” he said, adding that his ultimate goal is to take the concept to other markets.

As for Miraglia, her first 14 months in business have been a learning experience on many levels.

As noted earlier, she did a hard pivot, from hostels to guided hikes, thanks to input from mentors and what she called a “reckoning with reality” when it came to the costs and other challenges or making those hostels reality.

After pivoting and focusing on hikes, she did some proof-of-concept testing in the late summer of 2020, often giving away her product away as she did so. She found that there is promise, but likely more refinement of the business model as she gains more evidence concerning what will sell and generate profits.

Indeed, she’s learned there is considerable interest in private hikes — small groups and even one person going where they want to go and not necessarily on a pre-set course.

As she noted, there have been many challenges and hurdles for this venture. She started it too late to qualify for any PPP money, and has wound up bootstrapping the operation herself, drawing down a retirement fund to do so.

“As a for-profit venture, grant opportunities are scarce,” she said. “I joke that Joe Biden has invested in Berkshire Camino since I’ve invested the pandemic aid that I received as a citizen into the business. He’s welcome to come on a hike with us at no charge.

“My aim is to establish a solid baseline in 2021 that I can use to demonstrate to a lender or investor that this has viability,” she went on, adding that the business is not yet profitable and she is not drawing a salary. “I learned from walking the Camino de Santiago that the journey is long and you take one step at a time, stay present and flexible. Just like in business.”

 

The Finish Line

Miraglia didn’t finish the Camino on her second trek in 2019. She had completed roughly 250 of the 500 miles before she injured herself and was forced to eventually call a halt, pack up, and head home.

She remembers exactly where she had to call it quits, and has plans to go back to back there — 2024, when she turns 60, is the current goal — and finish the walk the Santiago de Compostela.

Between now and then? She has more immediate goals and dreams, especially to take the venture she started to stability and profitability. She is not at all sure she will get there — the road ahead is paved with question marks and uncertainty.

As it is for all entrepreneurs. There are more of them in the Berkshires these days, by many accounts. They’ve launched ventures that have been inspired by, accelerated by, or facilitated by the pandemic — which has provided the time and opportunity to reflect and, and in these cases, move a dream to reality.

 

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

Construction

Greener Days

MassDevelopment announced that Abercrombie Greenfield, LLC will receive $450,000 in financing for energy improvements to its office building at 56 Bank Row in Greenfield, the first project financed under the agency’s new Property Assessed Clean Energy (PACE) Massachusetts program.

Through PACE Massachusetts, capital provider Greenworks Lending from Nuveen will provide financing for a range of energy upgrades that were installed to the building, including  efficient electrification of space heating, energy-recovery ventilation, LED lighting and controls, improvements to windows and insulation, and a solar photovoltaic system on the roof. This financing will be repaid via a betterment assessment on the property.

“PACE Massachusetts stands to be a key financing tool for making commercial properties more energy-efficient,” said Housing and Economic Development Secretary Mike Kennealy, who serves as chair of MassDevelopment’s board of directors. “These efforts will benefit the Commonwealth and its communities by creating jobs, reducing energy consumption, and making progress towards Massachusetts’ clean-energy goals.”

MassDevelopment President and CEO Dan Rivera noted that energy upgrades at 56 Bank Row are the first to be financed under PACE Massachusetts. “We encourage property owners throughout the Commonwealth to consider how this flexible, long-term financing tool can help them tackle an energy-improvement project.”

Launched in July 2020, PACE Massachusetts is a new long-term option for financing energy improvements to commercial and industrial buildings, multi-family properties with five or more units, and buildings owned by nonprofits. The program enables commercial property owners to fund energy-efficiency and renewable-energy projects by agreeing to a betterment assessment on their property, which repays the financing.

“The renovation of the Abercrombie Building rescued a blighted historic property that was structurally failing.”

Offering more flexibility than a direct loan, PACE Massachusetts allows property owners to undertake comprehensive energy upgrades without adding new debt to their balance sheet and through longer financing terms of up to 20 years. MassDevelopment administers PACE Massachusetts in consultation with the Massachusetts Department of Energy Resources (DOER).

“DOER commends PACE’s first approved project for its commitment to comprehensive energy improvements and building electrification using heat pumps,” Department of Energy Resources Commissioner Patrick Woodcock said. “As the number of municipalities opting into PACE grows, we look forward to having more commercial properties take advantage of this program to finance renovations and retrofits to help meet the Commonwealth’s ambitious greenhouse-gas emission-reduction goals.”

Massachusetts cities and towns are required to opt into PACE Massachusetts by a majority vote of the city or town council or the board of selectmen, as appropriate, in order for a property within that municipality to be eligible for the program. Forty-seven cities and towns have opted in; the city of Greenfield was one of the earliest to do so in April 2018.

“This historic PACE financing for the complete energy-efficiency renovation of an underutilized building on Bank Row joins many energy-efficiency ‘first’ accomplishments in our city since we became the first green community in Massachusetts in 2010,” Greenfield Mayor Roxann Wedegartner said. “It’s a legacy we should all take pride in and continue to support.”

Built in 1896, 56 Bank Row is a 12,696-square-foot office building. The energy improvements are projected to save 189,000 kilowatt hours from the grid annually compared to a building built to current Massachusetts energy-efficiency code, which equates to a 28% overall reduction.

“Greenworks Lending from Nuveen is very proud to have worked with MassDevelopment to bring financing for Massachusetts’s first C-PACE project at 56 Bank Row,” said Greenworks Lending from Nuveen CEO and President Jessica Bailey. “We hope that this is the first of many C-PACE projects to come with MassDevelopment as we work together to bring financial and environmental benefits to local businesses and communities in Massachusetts.”

Bradley McCallum, owner of 56 Bank Row, added that “the renovation of the Abercrombie Building rescued a blighted historic property that was structurally failing. The project combines factors including a long-term lease with the Northwestern District Attorney’s Office, state and federal historic tax credits, an innovative design by Tom Douglas Architects, and a committed contractor, Mowery & Schmidt, and their team of subcontractors. Thanks to this team, we were able to transform the bones of this historic structure into a vibrant resource for the city of Greenfield.

“As with projects of this ambition and scale,” he went on, “we faced cost overruns, and one of the positive contributions that PACE Massachusetts provides Abercrombie Greenfield is the ability to retroactively refinance key energy-efficiency investments that we made and consolidate the outstanding bridge financing and private loans into a fixed 20-year repayment structure, providing credit beyond the 80% LTV, which our primary mortgage with Berkshire Bank is capped at. Berkshire Bank, which is our tax-credit investor and lender, has worked in partnership with Abercrombie Greenfield to secure our PACE Massachusetts financing.”

Construction

From Parking Lot to Plaza

MassDevelopment has awarded a $10,000 grant to the North Adams Chamber of Commerce to transform the Center Street parking lot at 55 Veterans Memorial Dr. in North Adams into a seasonal public dining corridor dubbed Mohawk Plaza.

The organization will use funds to add outdoor seating, a sidewalk surface mural, wayfinding signage, ambience lighting, and landscape work. The chamber will also crowdfund this summer and fall; if the organization reaches its $7,850 goal, it will receive an additional $7,850 matching grant from MassDevelopment.

The funds are awarded through MassDevelopment’s special Commonwealth Places COVID-19 Response Round: Resurgent Places, which was made available specifically to assist local economic-recovery efforts as community partners prepare public spaces and commercial districts to serve residents and visitors.

“Before this pandemic, the vibrant centers of our cities and towns were not only a driving force behind the strength of local economies, they were the places where we gathered to dine, to shop, and to be entertained, and the Commonwealth Places program is one way that we can help these areas bounce back stronger than ever,” said Housing and Economic Development Secretary Mike Kennealy, who serves as chair of MassDevelopment’s board of directors.

“The Baker-Polito administration continues to support downtowns and town centers through various economic-recovery programs,” he added, “and these Resurgent Places grants are providing nonprofit community organizations with the resources to activate public spaces, boost economic activity, and support an equitable recovery.”

Created in 2016, Commonwealth Places aims to engage and mobilize community members to make individual contributions to placemaking projects, with the incentive of a funding match from MassDevelopment if the crowdfunding goal is reached. In response to the pandemic, MassDevelopment announced the opening of the first Commonwealth Places COVID-19 Response Round: Resurgent Places in June 2020, and from August through October 2020, $224,965 in funding was awarded for 21 placemaking projects across Massachusetts.

In December 2020, MassDevelopment announced the availability of $390,000 in funding for a second Commonwealth Places COVID-19 Response Round: Resurgent Places. Nonprofits and other community groups can apply to MassDevelopment for seed grants of between $250 to $7,500 to fund inclusive community engagement, visioning, and local capacity building that will support future placemaking efforts, or implementation grants of up to $50,000 to execute a placemaking project. For implementation grants, up to $10,000 per project may be awarded as an unmatched grant; awards greater than $10,000 must be matched with crowdfunding donations.

“Amazing things can happen when communities reimagine underutilized public spaces, such as North Adams Chamber of Commerce’s vision for a parking lot steps away from the city’s Main Street,” MassDevelopment President and CEO Dan Rivera said. “MassDevelopment is pleased to help the organization create Mohawk Plaza, a space that will increase foot traffic downtown, provide additional outdoor dining, and reinvigorate a prime public way.”

Insurance

Expanding the Footprint

 

Berkshire Hills Bancorp Inc. and Brown & Brown Inc. recently announced the execution of a definitive agreement for the sale of the assets and operations of Berkshire Insurance Group Inc. (BIG), a subsidiary of Berkshire Hills, to Brown & Brown of Massachusetts, LLC, a subsidiary of Brown & Brown. The transaction is subject to customary conditions and is expected to be completed in the third quarter.

BIG has been providing insurance coverage to customers across the Northeast since its inception in 2000, growing into one of the largest insurance agencies in Western Mass. It provides personal and commercial property and casualty insurance solutions.

Sean Gray

Sean Gray

“Berkshire has entered into an exciting partnership with Brown & Brown through which we will be able to serve our customers better with an expanded offering of insurance solutions.”

“Consistent with Berkshire’s Exciting Strategic Transformation (BEST) program, this transaction allows us to simplify our operating model, repurpose valuable resources, and redeploy capital to support core businesses and strategic initiatives that will enhance long-term stakeholder value,” Berkshire Bank CEO Nitin Mhatre said. “As a result of this transaction, we will record a net gain on sale of approximately $0.55 per share on a GAAP basis in the third quarter, and anticipate $0.02 lower earnings per share in the second half of 2021.”

Sean Gray, president and COO of Berkshire Bank, added that “Berkshire has entered into an exciting partnership with Brown & Brown through which we will be able to serve our customers better with an expanded offering of insurance solutions. I also want to thank the dedicated team of employees at BIG, whom I’ve had the privilege of working alongside for the past 10 years, for their contributions to Berkshire and all our communities. I know they will continue to serve Berkshire customers well in their new roles with Brown & Brown.”

Brown & Brown has offered positions to existing BIG employees, resulting in no job eliminations. Following the acquisition, BIG will become a new standalone operation within Brown & Brown’s retail segment under the leadership of John Flaherty.

BIG’s offices in Greenfield, Longmeadow, Pittsfield, Stockbridge, and Westfield will continue to operate from their current locations, and its other locations will physically combine with existing Brown & Brown offices. In addition, through a partner relationship, Berkshire Bank will continue to refer customers to Brown & Brown. Don McGowan, a regional president in Brown & Brown’s retail segment with responsibility for various offices in Massachusetts and the Northeast, will oversee the new combined operations.

Don McGowan

Don McGowan

“This transaction allows us to further expand our footprint in Massachusetts with several new strategic locations that we believe enable us to better serve our customers.”

“This transaction allows us to further expand our footprint in Massachusetts with several new strategic locations that we believe enable us to better serve our customers,” McGowan said. “We are excited to welcome all of the talented BIG teammates to the Brown & Brown organization and look forward to finding fresh opportunities to offer a wide range of insurance products and services to new and existing customers.”

RBC Capital Markets is acting as financial advisor to Berkshire, and Luse Gorman, P.C. is acting as legal advisor to Berkshire on this transaction.

Berkshire Hills Bancorp is the parent of Berkshire Bank. Headquartered in Boston, the bank has $12.3 billion in assets and operates 115 banking offices, primarily in New England and New York. Brown & Brown Inc. is an insurance brokerage firm delivering risk-management solutions to individuals and businesses, and boasting more than 300 locations across the U.S. and select global markets.

Berkshire County

No Standing Still

Susan Wissler says visitorship is way up

Susan Wissler says visitorship is way up at the Mount — not just from 2020, but from pre-pandemic 2019.

It may not stack up to Edith Wharton’s best novels, but it’s a compelling story.

“We’ve had an incredibly good season, despite the challenge of staying in compliance with the latest CDC and local health recommendations regarding COVID,” said Susan Wissler, executive director of the Mount, Wharton’s former estate in Lenox that is now a hub for all kinds of arts, nature, and cultural programming.

In fact, Wissler said, this year’s visitorship has doubled that of 2020 — maybe not a striking statistic in itself, given the economic shutdown of that spring and a hesitancy among many people to leave their homes for much of the year. But this year’s figures are also 50% higher than they were in 2019.

Part of that success may be attributed to a decision last year to open up the property’s outdoor grounds and gardens for free. “We opened as a public park so people had a place to walk and enjoy beauty and nature in relative safety,” she noted. “We’ve got a pretty big space, and people really appreciated it.”

“We opened as a public park so people had a place to walk and enjoy beauty and nature in relative safety. We’ve got a pretty big space, and people really appreciated it.”

The house itself still requires admission, and Wissler worried people would take advantage of the free outdoor experience and leave. And maybe some did come with that plan — but many felt compelled to go inside, too. Thus, paid visitation topped the previous two years.

So did weddings, all of which were cancelled in 2020, many of them moved into this year. The Mount typically hosts about 12 weddings per year; it will welcome 26 between May and October.

Meanwhile, NightWood — an ethereal, immersive walking experience featuring original music, lighting, and sculptural elements — was a huge hit last winter, bringing in desperately needed revenue with limited attendance and timed tickets; the Mount will stage the attraction again later this year.

Still, the new focus on outdoor space — which included a lecture series under tents this summer — posed its own issues, particularly weeks when it rained and rained. “That has been a huge frustration for all culturals and restaurants, anyone focusing more attention outdoors,” Wissler said. “The weather was a punch in the stomach.”

MASS MoCA in North Adams also offers programming inside and outdoors, and found plenty of success with both in 2021. “June and July were actually our highest-attended months we’ve ever had — and that includes pre-COVID visitorship,” said Jenny Wright, the museum’s director of Communications.

“We had that brief moment after Memorial Day when we were able to lift restrictions — but we do have an indoor mask mandate in place since August 4 and require our staff to be vaccinated. But we’re very fortunate to have the luxury of lots of indoor and outdoor space on our side,” she noted, adding that, in addition to the museum’s wide corridors and spacious galleries making it easy to physically distance, MASS MoCA made good use of outdoor courtyard space this year to stage performances. “We’re very fortunate to have space on our side during this period.”

The museum’s robust artist-residency programs continued throughout the pandemic as well.

“When people are unable to come here, we can still get that story out through our digital programming, whether it’s visual or performing arts.”

“Even before we reinstated our performances, we were housing artists in residence to develop new work. That was the catalyst for us developing new digital programming. That was something we hadn’t done much of before,” Wright said, noting that the museum told artist stories with behind-the-scenes documentaries it then posted online as a way to keep the public connected even when they weren’t in the building. It’s also creating 360-degree virtual tours, starting with its famed Sol Lewitt exhibit, to post to the MASS MoCA website.

“Our mission is to make art … new art that has never existed before,” Wright noted. “When you come here and see that, it’s a powerful experience. But when people are unable to come here, we can still get that story out through our digital programming, whether it’s visual or performing arts.

“For us, it’s really thinking about ways to create multiple points of entry for people, not just the front door,” she went on. “That was something we hadn’t explored in too much depth before.”

Wissler said the Mount found similar success reaching new audiences virtually. “We were really reluctant to get into the pool of virtual programming, but COVID forced us to dive right in — and Zoom programming has been amazing.”

Specifically, events featuring guest authors have been a hit — and found a much broader audience than before. Now, an event that typically drew authors from the mid-Atlantic and New England can bring in guests from pretty much anywhere — and the potential audience has also expanded around the country and even around the world.

“That’s something we’ll continue as we move forward,” Wissler said. “We haven’t found a way to monetize it yet, but from a visitor standpoint, it’s a huge success.”

 

Dramatic Shifts

While many regional destinations and arts organizations shut down completely in 2020, Berkshire Theatre Group (BTG) turned in one of the year’s most notable success stories, creatively staging an outdoor, socially distanced run of Godspell in August in September — the only show featuring Equity stage actors in the entire country at the time.

Nick Paleologos, executive director, said planning for the 2021 season began in late 2020, and the general feeling as the calendar turned was that current health conditions weren’t going to change dramatically until late 2021 or even 2022.

“So we decided to build on what we learned in the summer of 2020, when we did Godspell outdoors. We planned for a modest but slightly more robust outdoor season on both our campuses, in Stockbridge and Pittsfield.”

In Stockbridge, that meant outdoor runs for The Importance of Being Earnest and a newer play, Nina Simone: Four Women, while in Pittsfield, the theater planned a community version of The Wizard of Oz, but with a slightly scaled-back supporting cast. The organization also scheduled a series of outdoor music performances.

“Then, quite suddenly, Gov. Baker decided to lift all restrictions on Memorial Day weekend, and that caught us a little off guard,” Paleologos said. “We had a planned a whole series of protocols, and now, all of a sudden, we were being told, ‘no problem, go back indoors, you don’t have to wear masks,’ all that.”

So the Stockbridge performances were shifted indoors, to the 120-seat Unicorn Theatre, while The Wizard of Oz in Pittsfield remained outdoors, under tents. While it didn’t have to mandate masks, the Unicorn did require them, even though it had recently upgraded its HVAC system.

“We decided on an abundance of caution — we would require masks and suffer any pushback there might be,” Paleologos went on. “But we encountered very little pushback. People were quite happy, even with the protocols, to wear masks for the entire indoor production. We had hardly any complaints. I think they were grateful to be back inside, in an air-conditioned space, instead of outdoors in Stockbridge during the summer.”

Meanwhile, in Pittsfield, attendees didn’t have to wear masks under the tents if they chose not to, and most didn’t.

But another “curveball,” as Paleologos called it, would follow — and, unlike Baker’s decision in May, it wasn’t a positive one. As the Delta variant of COVID-19 emerged and dramatically increased infection rates in a state where COVID had been largely under control, BTG had a decision to make. It was headed into the Nina Simone part of the season and opted to keep that show indoors — but require proof of vaccination for entry.

“Again, we braced outselves for a backlash which never came,” he said, adding that the theater did have to turn away a few people who did not carry that proof with them, even though they claimed to be vaccinated. But in most cases, those patrons requested a credit for a future performance rather than their money back, and other patrons thanked Paleologos for holding fast to the policy, he noted.

“They said the only reason they were there was because of the protocol. I think we’ve gotten to a stage where the issue of concern over spreading the virus has become almost a reflective action; I think people are kind of acclimated to that.”

 

Places in the Heart

The winter-season holiday show at BTG’s Colonial Theatre in Pittsfield will be held indoors, with masks and vaccination required, as well as distancing by placing an empty seat between seated parties.

In other words, the show goes on at this company that has learned not only how to pivot, but that its audience is willing to pivot right along with it.

Paleologos said the various shifts this year have not only made the organization more flexible, but have shown him that the public is willing to adapt as well — and that bodes well for any future ‘curveballs.’

“It’s been a real learning experience for us. As we look ahead, we’ve become more nimble with what we do and how we do it.”

It’s just one example of how people are seeking meaningful experiences right now and are, for the most part, accepting of whatever protocols are required to engage in them.

“I think people came out of 2020 feeling starved and lonely,” Wissler said. “They’re thinking about the Mount as a destination — a nice place to meet with friends and socialize. I think people are coming for many reasons other than tourism — it’s a great place to keep up and enjoy personal relationships.”

Wright agreed that the pandemic has driven home the importance of what destinations like MASS MoCA offer.

“After everything that’s happened over the past 18 months,” she said, “it really underscores the importance of the arts and cultural destinations during these difficult times — particularly contemporary art, which is not just reflections of the moment we’re in, but can present us with a view of what’s possible. And I think people really need that right now.”

 

Joseph Bednar can be reached at [email protected]

Special Coverage Wealth Management

Dollars and Sense

 

There are many myths concerning money, with many of them transcending generations of people in the same family. The truth is that many of these myths — including the one about how money will make you happy and solve all your problems — are false. Worse, these myths tend to limit one’s thinking and limit their financial success.

By Charlie Epstein

 

Most people do not realize they have myths about their money.

And even more people don’t take the time to analyze where these myths come from and why people hold them to be true.

I have worked with thousands of people over the past 41 years as a financial advisor. In the process, I have identified 15 myths people have about their money, which limit their financial and personal success.

A myth is defined as “an unproved or false collective belief that is used to justify something.” The biggest myth we have about money is that “it will make me happy and solve all my problems.”

Do you think money makes you happy?

Are you sure? Want to bet?

Did you know that 90% of all lottery winners go bankrupt within three to five years of winning the lottery? I’m talking millionaires. And the majority have stated they wish they never won the money. They’re miserable, depressed, and suicidal. How can this be?

“I am convinced that your money myths limit your thinking and impact how you approach your life and your finances.”

This happens because the most important thing in their life has been to get money, and now that they have it, they have no idea what to do with it. They often go on a massive shopping spree and buy all sorts of material items that don’t bring any lasting joy or fulfillment. And, more importantly, they stop working or doing anything productive to give their life purpose, meaning, and real value. What they fail to do is stop and ask themselves, “beyond money, what makes me happy?”

I am convinced that your money myths limit your thinking and impact how you approach your life and your finances. The three biggest financial myths most people have are:

1. My home mortgage needs to be paid off when I retire so I don’t have a payment;

2. I’ll be in a lower tax bracket when I retire; and

3. My home is an investment.

My father believed all three of these myths. When he retired, he and my mother moved to Florida to build the house of their dreams, on the golf course of his dreams. He was going to pay cash for that house — $500,000. He was 68 at the time. I said, “Dad, I want you to take out a mortgage instead.”

My dad was shocked. “A mortgage! For how long?”

I said, “for 30 years.”

“Thirty years!” my Dad bellowed. “I’ll be dead before it’s paid off!”

“So what do you care?” I smiled. “You’ll be dead!”

To which my father asked, “what will your mother do?”

I said, “she doesn’t play golf, and she doesn’t play mahjong, so if you die before her, I will sell that house and move her back north!”

I convinced my Dad to put $100,000 down and finance the other $400,000 with a 30-year mortgage at 5%. This was 1992. Bill Clinton had come into the White House and raised the marginal tax rate from 36% to 39.6%. There went money myth #2 — the belief he would be in a lower tax bracket when he retired (a belief I am sure many of you reading this article share).

That didn’t happen. The good news was, he could write off and deduct 40% of his mortgage payments in the first 15 years because it was all mostly interest. My dad was now ‘leveraging’ other people’s money (OPM) by using the bank’s money to take out a mortgage, and Uncle Sam’s money (USM) by deducting 40% of his mortgage payments.

The net cost for my dad to borrow the bank’s money was 3% (5% x 40% = 2%, which he could deduct, so his net cost to borrow that money was 3%). I said to my parents, “If I can’t make you net more than 3% on your $400,000, fire me as your financial advisor.” We averaged 7% to 8% on their money for the next 13 years of his life.

When my dad passed away, I sold my mother’s home in Florida, at a $100,000 loss. This was 2005, and the real-estate market in Florida was overbuilt, and no one wanted to be on a golf course. So much for the third money myth about your home being an investment. I than moved my mother back north and built her a home in an over-55 community. She was 79 at the time, and she said to me, with a twinkle in her eye, “son, do I get to take out a mortgage?” My mother is now 94, and she still has a mortgage — at 2.5%.

What does my mother care about? She only cares that she has enough money to pay for everything she desires to do. What do I care about? That I’m not tying up her money in a ‘dead asset’ — her home. She can’t eat it or drink it, and it doesn’t generate any income for her. And it is not an investment. I know I can make more than 2.5% on her money by using OPM to generate her even more income.

The key to being financially successful with your money is to understand how to maximize OPM and USM to make money on ‘the spread.’ The spread is the difference between what it costs to use other people’s money and what you can make investing your money somewhere else.

Let me add one big caveat to this discussion. If, psychologically, you must have your mortgage paid off so you can sleep at night … then pay it off. I always say psychology trumps economics. Just remember, you may feel good having it paid off, but economically, you won’t make as much of a return on your money and your assets.

 

Charlie Epstein is an author, entertainer, advisor, entrepreneur, and principal with Epstein Financial. He also presents a podcast, Yield of Dreams; yieldofdreams.live; (413) 478-8580.

Banking and Financial Services Special Coverage

Open for Business

Romika Odedra says the branch’s layout emphasizes the customer experience.

Holyoke-based PeoplesBank recently expanded its presence in Connecticut with a branch in West Hartford. The new location is projected to help the bank grow its already considerable portfolio of consumer and commercial business from south of the border, especially in an ongoing climate of mergers and acquisitions.

 

When PeoplesBank opened its newest branch in West Hartford on August 30, it wasn’t exactly its first foray into Connecticut’s capital region. Far from it.

“This is a retail opening in West Hartford, but half of our commercial business is in Connecticut already — actually, about 60%,” said Matt Bannister, the bank’s senior vice president of Marketing & Corporate Responsibility.

“Some is up in the Granby-Windsor-Suffield area,” he went on, alluding to PeoplesBank’s first three Connecticut locations, in East Granby, Suffield, and West Suffield. “Some is down here in the Hartford region, and it actually goes all the way down to the shore. We’re kind of catching up with this retail storefront because the commercial customers want a presence here. They’ve been saying to us, ‘come down to Connecticut.’ And West Hartford just makes sense; it’s a great community, and a good place to be.”

Aleda De Maria, executive vice president of Consumer Banking and Operations, said a growing commercial presence in Hartford County cried out for a full-service physical branch.

“The banking centers are there for when they need a little more contact, when they have a little more complexity, or they just want to expand their relationship. We need to make sure we have everything.”

“We absolutely need it. The majority of our new accounts are still opened at brick-and-mortar locations. For more complex conversations, customers want to talk to a person, and they want to have that live interaction. There still is a need for that face-to-face contact.

“I think what the industry is trying to do with the self-service channels — with online, with mobile, with video bankers — is give people the ability to do the quick, day-to-day transactions when they want to, without having to park and go in and talk to somebody, and get it done quickly,” she went on. “The banking centers are there for when they need a little more contact, when they have a little more complexity, or they just want to expand their relationship. We need to make sure we have everything.”

Michael Oleksak, executive vice president and chief lending and credit officer, said all those Connecticut dollars in the bank’s commercial portfolio have not come mainly from the Granby-Suffield area, but predated those physical locations.

Matt Bannister with one of the West Hartford branch’s two interactive video teller machines.

Matt Bannister with one of the West Hartford branch’s two interactive video teller machines.

“We have a significant amount of business in the Greater Hartford area, specifically in the Farmington, Glastonbury, West Hartford communities and downtown Hartford, but we also go as far as New Haven and Greenwich. So our tentacles are fairly long when it comes to our Connecticut presence.

“Most of that is in commercial real estate, which tends to be more transactional,” he went on. “We are able to do a lot of full-service banking for these commercial real-estate customers because of our cash-management expertise and the different products we have, but without a branch presence, it’s really difficult to do business banking.”

The branch presence in West Hartford allows the team to do more commercial and industrial (C&I) lending, and complements a recent expansion of the bank’s C&I team with former TD Bank veterans, Oleksak noted.

“We have a very strong following now, and I think by having a physical presence there, we’ll become a more visible part of the community,” he went on. “We do support our current borrowers, including with a lot of their philanthropic initiatives, but it’s kind of behind the scenes because we don’t have a presence there. But with a physical presence, and with the disruption in the market with the M&T acquisition of People’s United, it will really open the door for us to be a bigger part of the community.”

De Maria agreed. “We’ve already created such a solid foundation with our name and then with the physical presence from the acquisition we did in Suffield in 2018,” she told BusinessWest. “And now, with our West Hartford presence, I think we have a solid opportunity to bring the service we provide for our commercial customers to our retail-customer world, and really marry those two sides together and make an impact.”

 

Making Contact

Many visitors to the new branch will first notice the interactive video tellers, one in the entry and one in the drive-thru lanes, bringing the bank’s total number of such machines to 22 at 17 locations. Users can call up a live teller in Holyoke who manages four or five machines at once.

“That way, we can be open seven days a week and have extended hours and not have to have people physically in the branch. And the video banker can do almost any transaction,” Bannister said, noting that Peoples is the only bank in the Hartford to offer the service. “Part of our technology story is good, consumer-facing technology.”

Romika Odedra, vice president and regional manager, said customers appreciate face time with a live person rather than interacting with a machine and the more limited options available at an ATM. And Bannister added that, with the pandemic still raging, many customers appreciate being able to conduct complex transactions in a contactless way.

“We are able to do a lot of full-service banking for these commercial real-estate customers because of our cash-management expertise and the different products we have, but without a branch presence, it’s really difficult to do business banking.”

“Video tellers are something we’re proud to bring to the market,” De Maria said. “It brings seven-day-a-week banking to West Hartford and our surrounding areas.”

Once inside the branch, customers will see pods instead of traditional customer lines — a model Peoples and other banks have been implementing for years. Customers can stand beside the teller and even see what he or she is looking at on the computer screen, if necessary. “In the beginning, people were like, ‘where do I go?’” Odedra said. “But it’s so easy — it’s warm, it’s welcoming, it’s not ‘there’s the line.’ It’s nice to have that one-on-one experience.”

The branch also employs a ‘universal banker’ model, Bannister said. “Any bank employee you see out here can do all the transactions. You can go to a teller pod or pop into an office if it’s more convenient or you just want privacy to have a conversation.” In other, more specialized offices down the hallway from the main area, he added, the bank will offer a mortgage expert, a wealth adviser, and other ancillary services.

And in front, at the main entrance, is a high table, couch, and coffee bar. “We’re trying to say to people, ‘come on in and hang out; get to know us a little bit,” Bannister said. “The thought is, we want to have sort of an open storefront.”

That’s partly to reflect the neighborhood the branch is in, with restaurants and small shops lining the streets and the shopping and dining mecca Blue Back Square just down the road.

“This area really is hopping with foot traffic,” he said. “And if you’re a bank with a retail storefront, you want foot traffic.”

Those who drive to PeoplesBank will appreciate the free parking lot the bank shares with the town’s Post Office.

“I used to work at a different bank, and that was the biggest issue we had, the parking,” Odedra said. “I’m so glad we have the parking we have. We don’t have to rush the customer out; we have time to have that one-on-one with them and invite them to have a cup of coffee.”

Bannister said West Hartford has been an enthusiastic town to work with, from its Chamber of Commerce to local economic-development leaders.

“Right from the start, when we were saying we wanted to come down, they were like, ‘how can we help?’ We’re in a lot of communities, and some of them are very welcoming, and some are maybe not so much. This one has been great to work with.”

 

Opportunity Knocks

The branch is fully staffed as well, with a mix of on-site and hybrid workers, reflecting the current makeup of the entire PeoplesBank organization. Some are West Hartford natives who know the market, Bannisher said, while some were attracted by working near all the nearby restaurants and other neighborhood amenities.

Aleda De Maria

Even in an age of mobile banking, Aleda De Maria says, people still want face-to-face interaction at branches for many services.

There’s room to expand in Hartford County, he added, with plans to open at least two more branches in the next couple of years.

“We’re coming in with a message of ‘we’re here, and we’re here to stay, and we can do everything the big banks do, but with a local feel and local decisions,’” De Maria said. “And I think that’s what’s missing in banking in general nowadays — being able to bank how you want to bank but also at a community bank where you don’t have to worry about who’s going to buy them.”

That presence means civic involvement and philanthropy as well, Bannister said, noting that PeoplesBank plans to give close to $60,000 in the first month alone to local organizations like Habitat for Humanity, Hands on Hartford (which assists with food pantries and the homeless population), the United Way, Foodshare, and even two West Hartford community events the bank will sponsor this fall and next summer.

“Right from the start, when we were saying we wanted to come down, they were like, ‘how can we help?’ We’re in a lot of communities, and some of them are very welcoming, and some are maybe not so much. This one has been great to work with.”

“We feel like we’re leading with the values we want to be known by in the community, which are innovation, technology, customer service, and the community support.”

De Maria agreed with Bannister than broadening the bank’s footprint in Connecticut is a must. “We will continue to actively look for physical locations, primarily in Hartford County,” she said. “We’re not opposed to outside Hartford County should it make sense, but in Hartford County, we feel we have an opportunity for our brand to really make an impact in the community.”

And that means expanded business, including commercial lending, Oleksak said. “I think there’s tremendous opportunity in this market for us, given our size and the experience of our lending staff. We’re very diverse, and between small business, large commercial real-estate loans, and now C&I expertise, I think we bring a lot to the table. It’s a great opportunity for us.”

 

Joseph Bednar can be reached at [email protected]

Community Spotlight Special Coverage

Community Spotlight

By Mark Morris

Russell Fox (left) and Karl Stinehart say Southwick benefits from its recreational amenities

Russell Fox (left) and Karl Stinehart say Southwick benefits from its recreational amenities, but needs commercial and industrial development as well.

When they talk about managing their town into the future, officials in Southwick emphasize the word “balance.”

In order for the town to remain a desirable place to live, said Karl Stinehart, chief administrative officer, there needs to be a combination of housing and recreation areas as well as commercial and industrial development.

“We like to point out that Southwick is a recreational community,” he noted. “We also want to make sure our zoning allows for commercial and industrial developments because the taxes they contribute will keep our town an affordable place to live.”

Russell Fox, vice chair of the Southwick Select Board, reinforced the recreational community description by pointing to the Congamond Lakes, which make up nearly 500 acres of recreational space in town. “Also, the Southwick Rail Trail has become a gem in our community, running 6.5 miles through town.”

Another big recreation activity happens at the Wick 338, the popular motocross track that hosted a national event in July and drew more than 30,000 people to Southwick.

In recent years, living at the lakes has become more desirable, and, as a result, prices for houses and lots are skyrocketing. As lake property increases in value, it also drives up the tax bill for residents there.

“I’m concerned about the retirees who have lived on the lake for years who may now have trouble staying in their homes because of the tax increases,” Fox said. “If we can attract more business to Southwick, we can help offset that tax burden.”

One company, Carvana, proposed to build a 200,000-square-foot facility off Route 10 and 202 in Southwick. Carvana is a website that allows consumers to buy used cars completely online and have them delivered to their home. The $100 million facility would have stored, repaired, and cleaned cars for delivery across the Northeast. Carvana projected the Southwick site would have employed 400 people and paid $900,000 each year in property taxes to the town.

The project was initially approved by the town’s Planning Board and Select Board, but hit a snag when a local group called Save Southwick strongly opposed the facility. In a series of public meetings, the group cited concerns about safety, traffic, and burdens on the town’s infrastructure. As the project became more controversial, Carvana withdrew its proposal this summer.

To kill the project that late in the process was frustrating for some, but Fox looks at the Carvana situation as a learning experience for everyone involved.

“It became clear from a vocal group that if a project is too big, they won’t support it,” Fox said. “Even those opposed to Carvana learned how government works, so if that encourages more civic engagement, then we’re all for it.”

Stinehart said the town is currently developing a new master plan that includes a process to allow earlier citizen input on zoning decisions to avoid episodes like Carvana in the future.

“The idea is to have these discussions sooner rather than later when we are considering a project,” he explained. “This also gives citizens an opportunity to learn more about the laws and the process of getting things done.”

 

Responding to a Crisis

When the pandemic struck last year, Southwick was still able to keep the town’s services running.

“All our departments in town continued to provide services and got us through the height of the pandemic by being flexible and adaptive,” Stinehart said.

The Town Hall building where many municipal functions are located remained open for most of the pandemic. Like towns everywhere, Southwick relied on remote online platforms like Zoom for meetings when necessary.

In March 2020, Southwick was one of the first communities to hold a town meeting outside. Because Southwick has an open-meeting form of government, Fox explained, a town meeting was held in the Southwick High School parking lot.

The west side of the Greens of Southwick

The west side of the Greens of Southwick is almost full, while homes on the east side have yet to be constructed.

“It was a special meeting with one agenda item, the decision to treat the lakes with alum,” he noted. Alum — or aluminum sulfate — is commonly used to keep algae blooms down and improve water quality. “The timing was important because we had to treat the lakes by the first week of April, otherwise the alum would not be effective.”

In 2020, Stinehart noted, it was especially important to make the lakes usable. “People couldn’t wait to get outside and do something recreational, so we made sure the lakes were ready for the summer.”

Southwick at a glance

Year Incorporated: 1770
Population: 9,502
Area: 31.7 square miles
County: Hampden
Residential Tax Rate: $17.59
Commercial Tax Rate: $17.59
Median Household Income: $52,296
Family Household Income: $64,456
Type of Government: Open Town Meeting; Select Board
Largest Employers: Big Y; Whalley Computer Associates; Southwick Regional School District
*Latest information available

People also spent more time in their yards, which benefited Southwick farmers. Fox said area farms sold more plants for flower beds than ever before in 2020. “Most plants sold out early because people were stuck at home and wanted to get outside to do things in their yard.”

The pandemic also delayed the full celebration of Southwick’s 250th anniversary from happening in 2020. After a kickoff event on New Year’s Eve in 2019 that brought out hundreds of residents and featured fireworks, an outdoor event in February 2020 followed, featuring ice sculptures. Then the pandemic kicked in and put further events on hold.

On Nov. 7, the actual 250th anniversary of the town’s founding, officials in Southwick arranged a call with officials in Southwick, England. That was followed by a parade that traveled through all the neighborhoods in town.

“It was a rolling parade that was well-received because people could go out their door or to the end of their street to see it,” Stinehart said. “The people in town really appreciated it.”

The 250th celebration still has one event remaining, a full parade for people to attend on Oct. 16 with fireworks later that evening at Whalley Park. Fox called the October events a “belated birthday celebration.”

Both Stinehart and Fox have been impressed with the interest in the anniversary, as more than 50 residents joined the organizing committee for the 250th celebration.

“We had a good mix of people on the committee, some who had just moved to town and others who have lived here their entire lives,” Fox said.

Stinehart quickly added, “no other committee in town has that kind of turnout.”

As the town gradually makes its way out of the pandemic, Stinehart mentioned a regional grant program undertaken with the town of Agawam to provide microlending for small businesses.

The town treated the Congamond Lakes in the spring of 2020

The town treated the Congamond Lakes in the spring of 2020 to improve water quality for people clamoring to enjoy the outdoors during the pandemic.

“We are encouraging small businesses that need help to apply for these grants,” he said, adding that Agawam is the lead community on the grant.

Looking forward, Stinehart hopes to use funds from the American Rescue Plan Act (ARPA) to address water and sewer projects in Southwick. Fox spoke in particular about a water-pressure situation town leaders are hoping to address with the ARPA funds. He said projects like this sound like mundane details but can have real and lasting impacts on the town.

“If we address the water-pressure problem, it improves our fire-protection ability and ultimately affects homeowners’ insurance rates for residents,” Fox added.

 

Places to Call Home

The town has more new homes in the works, most notably the Greens of Southwick, where new, homes are being custom-built on each side of College Highway on the property of the former Southwick Country Club. The west side of the Greens development is nearly full, while construction on the east side has not yet begun.

Stinehart said he would like to leverage ARPA funding to increase broadband infrastructure in Southwick. In a separate effort, the town has met with Westfield Gas + Electric’s Whip City Fiber division to explore the feasibility of fiber-optic internet service for Southwick.

To address future energy savings for the town, Southwick has applied for a Massachusetts Green Community designation which would make it eligible for grant funding on a number of energy-efficient projects.

The tax rate for Southwick is scheduled to be released in the fall, and Stinehart said the goal is for a single uniform rate that will be competitive with other communities “because that’s good for business.”

Despite the issues around Carvana, Fox added, Southwick has welcomed plenty of new businesses and has seen expansion for some already there.

“By letting everyone know Southwick is open for business, we can keep this beautiful place where people want to live,” he said. “It’s all about that balance.”

Wealth Management

How the Pandemic is Reshaping This Decision for Americans

By Jean M. Deliso, CFP

 

After a year of Zoom calls, a deadly virus, inflated real-estate values, and a crazy stock-market surge, many Americans, mostly Baby Boomers, who can afford to retire are taking the plunge.

This pandemic caused mayhem for everyone. It drove the healthcare industry almost to collapse, families lost loved ones prematurely, parents became teachers, and many businesses did not survive. But amid all the gloom and doom was a silver lining for many. The government became efficient with quick economic actions, families re-evaluated the benefits of family time, pollution got a brief time out, and businesses became more electronically efficient, to name a few.

Through all the challenges, people took time to re-evaluate their priorities in life. Many are choosing to rethink their future and what is important to them going forward. In fact, about 2.7 million Americans 55 or older are contemplating retirement years earlier than they had imagined because of the pandemic, according to a Bloomberg report. Between increasing retirement-account values, those lucky enough to have pensions, an increase in home values, and government funds that have been put back into the economy, retirement is happening sooner than expected for many.

Jean M. Deliso

Jean M. Deliso

“Whatever your circumstance, achieving your retirement objectives will not happen automatically. The earlier you start planning, the better off your chances are of enjoying a happy, fulfilling, and long retirement.”

As a certified financial advisor, I have met with many individuals contemplating retirement who have decided “enough is enough — life is too short.” Some reasons include a scare with cancer five years ago that made my client reconsider his commitment to climbing the corporate ladder, or “I’m just not happy doing what I’ve been doing for years; it’s no longer fun.” Potential retirees have either saved enough or have decided to spend less in their retirement years.

In contrast, many Americans who were pushed out of their jobs by the economic slide of the pandemic had to take an early retirement against their wishes. This has resulted in them receiving lower Social Security benefits and pension amounts. Twenty-two percent say the pandemic has forced them to spend their emergency savings, 10% have reduced their retirement-plan contributions, and 12% have withdrawn money from their retirement accounts, according to a survey by the National Institute for Retirement Security.

Unfortunately, both scenarios have resulted in increased stress to Americans in the workforce regarding retirement. None of us know our date of death, which makes retirement planning tricky for most.

Too many Americans rely solely on Social Security. This pandemic proved that those benefits do work; checks were consistently received by Americans as the pandemic raged around them. This experience shows that the Social Security system works. Also, checks were sent to those who couldn’t find jobs.

Whatever your circumstance, achieving your retirement objectives will not happen automatically. The earlier you start planning, the better off your chances are of enjoying a happy, fulfilling, and long retirement. Here are a few steps to consider for a successful retirement:

1. Determine your cost of retirement. This includes your monthly living expenses, your age to retire, and your life expectancy.

2. Apply your income sources. Review what you will have available to you, such as Social Security, pensions, immediate annuity payments.

3. Withdraw from your portfolio assets. Take withdrawals against your portfolio assets to make up any difference needed. These assets may include brokerage accounts, money-market accounts, 401(k)s, 403(b)s, IRAs, and annuities. (Withdrawals may be subject to regular income tax and, if made prior to age 59½, may be subject to a 10% IRS penalty. In addition, surrender charges may apply.)

4. If necessary, consider changes. If, after steps 1-3, you are falling short on your plan, consider changes such as saving more, redefining your retirement age, or considering part-time employment during retirement.

5. Consider a professional. This can help you clarify your goals and objectives in retirement.

 

Jean M Deliso, CFP is a financial adviser offering investment-advisory services through Eagle Strategies LLC, a registered investment adviser.

Wealth Management

And When It Comes to Investing, That’s Not a Good Thing

By Jeff Liguori

 

Malcolm Gladwell, prolific non-fiction writer, journalist, and podcaster, has written extensively about mastering a subject. In his book Outliers, Gladwell builds upon the idea that it takes a person 10,000 hours to become a master, or expert, at something.

The premise was originally put forth nearly 50 years ago by two academics, Herbert Simon and William Chase, and published in the American Scientist specifically to address how one becomes an expert chess player. Gladwell elaborated on the idea by saying that an innate ability, or even exceptional intelligence, on a particular subject was not enough to excel or master that subject. In an article he wrote for the New Yorker in 2013, he stated “nobody walks into an operating room, straight out of a surgical rotation, and does world-class neurosurgery. And second — and more crucially for the theme of Outliers — the amount of practice necessary for exceptional performance is so extensive that people who end up on top need help.”

Today it seems that expertise is under attack. Whether it is climate science, economics, or healthcare. There are no hurdles to gathering information, factual or not, which has emboldened many to opine on, and in some instances act on, areas for which they are not equipped. Being informed and questioning authority is not a bad thing. But acting as an expert has the potential for serious long-term damage.

Let’s break down the 10,000 hours concept. A young woman decides on majoring in accounting her junior year in college. She has four semesters until graduation, where most of her classes are related to her major. Let’s assume that is a total of 100 hours of study. She graduates, gets a job in a major accounting firm where she likely works 50 hours per week. At night she studies for her CPA exam. After three years, between college study, work, and prepping for the CPA, she has logged approximately 3,200 hours of work in a single subject: accounting.

And it is likely in a specific area, either audit or tax work. At 25 years of age, she is about one third of the way toward the 10,000-hour rule. This is precisely why a business or individual, with complex accounting issues, would not hire a young person with that level of experience. The analogy could be made for doctors, lawyers, or diesel mechanics as well.

In the investment field, the information needed to manage one’s money is widely available. I’m not aware of a network that dedicates 24 hours to the practice of medicine. But turn on CNBC and it is a non-stop barrage of stock quotes and ideas, complete with bright colors, loud voices, and blinking lights. It thrives on our culture of excitement and reality TV.

Almost anyone with a decent Internet connection can invest his or her hard-earned funds. And early success reaffirms the dangerous bias that ‘I’m a talented investor.’ Until one morning, inevitably, that “hot stock” that had appreciated 78% is down 50% before the market even opens because the drug the company produced killed people in the FDA trial, or the company missed earnings by a wide margin, or the CEO was a fraud. Much of which could’ve been fleshed out by skilled analysis and a disciplined approach to investing to avoid such scenarios.

There is nothing inherently wrong with the do-it-yourself trend. However, the intersection of social media, and the assault of information from a variety of sources (some questionable), has empowered many to shun traditional expertise that has been built upon years of study. Logging on to WebMD to diagnose your poison ivy or watching a YouTube video on installing a garbage disposal, or even learning about a public company’s business on Yahoo! Finance is smart. Reputable sources with solid information. But these are part-time tasks, which don’t carry significant consequences if done incorrectly. They are suited for the curious individual with a penchant to learn.

But for more complex matters, requiring a longer success horizon — say preserving your retirement funds to support your lifestyle once your earning years are over — it is best to leave that to a full time, educated, disciplined professional. They’re called experts.

 

Jeff Liguori is the co-founder and chief Investment officer of Napatree Capital, an investment boutique with offices in Longmeadow as well as Providence and Westerly, R.I.; (401) 437-4730.

Banking and Financial Services

Developments of Interest

By Mark Morris

John Howland calls the recent flood of deposits an “unprecedented” situation.

John Howland calls the recent flood of deposits an “unprecedented” situation.

John Howland admits that the word ‘unprecedented’ is overused these days. But for him and others in the banking business, it seems like the right word to describe all that’s going on.

Howland, president and CEO of Greenfield Savings Bank, was talking specifically about the record amounts of deposits flooding into banks — and what’s happening with those deposits, or not happening, as the case may be.

In the early months of the pandemic, from January to June of 2020, banks in the U.S. saw a surge of nearly $2 trillion in deposits. At that time, most people were staying close to home and had reduced their spending to necessities.

As a local example, PeoplesBank reported deposit increases of 33% since last April, or nearly $700 million in additional deposits.

More deposits arrived as businesses applied for Paycheck Protection Program (PPP) loans and consumers received stimulus checks from the government. During normal times, money gets deposited but does not stay in an account for long. These days, however, deposits are staying and growing to an extent Howland and his counterparts in Western Mass. have never seen before.

And while record deposits would seem like a good thing, all that cash is sitting still, for the most part, and the key to any bank generating revenue and earning profits is loaning its deposits out to borrowers.

“I never thought I would say there are too many deposits and not enough people to lend the money to,” said Tony Worden, president and chief operating officer of Greenfield Cooperative Bank. “The point of our business is to get deposits … so this goes against everything we were taught.”

In normal times, banks take in deposits and lend that money out to businesses and individuals. Balancing the number of loans to deposits helps determine what interest rates will be paid to savers and charged to borrowers. Banks profit on the difference between the two.

“I never thought I would say there are too many deposits and not enough people to lend the money to. The point of our business is to get deposits … so this goes against everything we were taught.”

But these are certainly not normal times. These days, banks have record deposits and diminished loan demand — for several reasons, which we’ll get into later — which translates to lower interest rates for savers and borrowers, as well as lower profits for banks.

Howland pointed out that the lower interest rates are great news for people looking for a business loan or a mortgage.

“The residential and commercial rates are down to levels that were inconceivable 10 years ago,” he said, adding that, moving forward, banks will be competing much harder to entice people to borrow money than deposit it.

 

By All Accounts

There are many theories as to why deposits have soared at area banks — and why those deposits are going largely untouched.

Dan Moriarty, president and CEO of Monson Savings Bank, suggested that once people tightened their spending during the pandemic, they may have changed their overall spending patterns, which is in many ways good for consumers, but not for the overall economy.

“It’s good for consumers to increase their savings and their capacity to have money, but it also slows down the economy,” Moriarty told BusinessWest. “We believe there is still some pent-up rebound spending by both consumers and businesses that we will be seeing.”

Howland agreed, noting that there are a number of reasons contributing to the surge in deposits, with one of them bring what he called a “flight to quality.”

“With all the uncertainty in the world, people understand that putting their money into a bank where their deposits are insured by the FDIC is one of the safest moves you can make,” he said, adding that, despite the consistently upward movement of the stock markets, many consumers are seeking a safe harbor in which to park their money.

Tony Worden says he never expected there to be too many deposits and not enough people to lend to.

Tony Worden says he never expected there to be too many deposits and not enough people to lend to.

As for the business of converting those deposits into loans — and revenue — many of those same factors are holding some consumers back from borrowing, said those we spoke with, although many have pressed ahead with purchases of new cars, new homes, and vacation homes.

Meanwhile, a number of businesses, still struggling to fully recover from the pandemic, are being cautious about moving ahead with expansions or new ventures. And for those that have the confidence to move forward, the current workforce crisis is keeping them from doing so.

Indeed, Worden said the current labor market is affecting activity in commercial lending. “We have businesses that can’t take on all the jobs they want because they don’t have enough staff to get them done.”

Moriarty agreed, but spoke optimistically about the prospects for improvement when people return to the workforce in large numbers. “Once our businesses can hire the staff they need and expand their products and services, they may look to the banks to borrow and grow.”

The surge in deposits and frustrating inability to put much of them to work has been one of many stories to unfold during what has been a challenging — and very different — year for area banks.

They all played a key role in helping businesses apply for PPP loans when they became available last spring. During two rounds of PPP loan offerings, Moriarty said, Monson Savings processed 565 loans totaling nearly $50 million.

In the early days of the pandemic, qualifications for PPP loans included every small business that was affected by COVID-19. Tom Senecal, president and CEO of PeoplesBank, said many applied because they didn’t know if they were going to be impacted.

“It’s good for consumers to increase their savings and their capacity to have money, but it also slows down the economy. We believe there is still some pent-up rebound spending by both consumers and businesses that we will be seeing.”

“There were many businesses that thought they were going to be hit hard but really weren’t,” he noted, giving an example of construction companies that were closed early in the pandemic but were then designated as essential and allowed to reopen.

Worden added that many companies that received PPP loans in the first round didn’t touch the money until it became clear their loan would be forgiven by the government. Once they figured out how to get loan forgiveness, they didn’t sit on the next round.

“We’ve had around 96% of our first- and second-round PPP loans forgiven with no denials,” he said. “The only ones who haven’t been forgiven have all started the process.”

All the bankers who spoke with BusinessWest said they were grateful to process PPP loans for area businesses. Worden said the urgency to get the first-round applications done required an “all hands on deck” approach that brought in many outside the loan department. His story reflects similar efforts from the other banks.

Dan Moriarty

Dan Moriarty says the pandemic changed people’s spending patterns, which may not be good for the overall economy.

Another dominant story during the pandemic was the real-estate boom, driven in part by record-low interest rates. Moriarty said activity on the buying and selling side has been brisk for some time. “We’ve seen a lot of activity where people are moving into a new house or buying a second home, whether it’s for vacation or an investment.”

The low interest rates have also brought a significant increase in people looking to refinance their mortgage.

“While it’s smart for people to refinance their current debt to get a lower rate, it doesn’t necessarily create new funds for the bank,” Worden said.

In early 2020, Monson Savings opened a new branch in East Longmeadow to increase its access to more companies and consumers. Moriarty admitted he had some anxiety about the timing.

“We made the decision back when no one predicted the pandemic would last so long,” he said, noting that, after a soft opening in August 2020, the branch has performed far above its forecasted numbers. “We’ve seen deposits increase 40% to 50% from when we opened.”

 

Bottom Line

All the bankers we talked with agreed the next three to six months will give everyone a better idea of where the economy, COVID, and the prospects for area banks are headed.

“I think we need to focus on getting through these next few months, and let’s get through the Delta variant,” Worden said. “We all have short-range goals, but we’re also keeping our eye on the long range.”

And that long-range forecast will hopefully call for taking that surge in deposits and putting it to work in ways that will bolster the local economy.

Banking and Financial Services

Know the Rules

By James T. Krupienski, CPA

 

At the start of the COVID-19 pandemic in the early parts of 2020, the concern of business survival was the number-one thought of countless businesses, with each industry having its own struggles. The medical industry was not without its own real concerns at that time, particularly given its role in the pandemic fight. People would continue to get sick, require treatment, and see their physicians, but how could it be done safely?

Recognizing the financial crisis that was about to overtake this industry, along with how detrimental it was for the industry to remain open and accessible to patients, the federal government took dramatic steps. In addition to Paycheck Protection Program (PPP) loans, for which medical practices were eligible, the Coronavirus Aid, Relief and Economic Security (CARES) Act also allocated funds directly to the medical industry through the Department of Health and Human Services (HHS) and the newly created Provider Relief Fund (PRF).

James T. Krupienski

James T. Krupienski

“While the COVID-19 relief provisions, as part of the CARES Act, provided a lifeline for many medical, dental, and other healthcare-related practices during the pandemic, that support was not without certain compliance requirements and reporting.”

The first round of funding, which was completely unexpected to many, occurred in early April 2020, when $30 billion was deposited directly into the accounts of eligible practices. Throughout 2020, additional funds were later rolled out in phases 2 and 3, as well as through targeted distributions to specific industries, such as rural providers and skilled-nursing facilities. Of importance is that, for all practices receiving these funds, there are several rules to be followed.

While the COVID-19 relief provisions, as part of the CARES Act, provided a lifeline for many medical, dental, and other healthcare-related practices during the pandemic, that support was not without certain compliance requirements and reporting, which we will dive into within this article.

 

Attestations

First, within 90 days of receipt of the funds, each provider was required to attest to certain terms of use. For those electing to return the funds, it was required to be done within 14 days of this attestation. Attestations were required for receipt of funds in all phases and were to be completed through use of a portal with the HHS (www.hhs.gov/coronavirus/cares-act-provider-relief-fund/for-providers/index.html#how-to-attest).

 

Reporting

As part of the attestation process, any provider receiving more than $10,000 in payments through the PRF would be required to report on use of the funds. While the specifics on the exact reporting took months to be finalized and continued to be reworked by the HHS, the general guidelines were known. Barring no future changes, PRF dollars are to be applied in the order of:

1. Certain qualifying expenses that can be directly attributable to coronavirus; and

2. Lost revenues.

Of greatest importance is the understanding that the use of these funds must be kept separate and distinct from the use of other coronavirus-relief aid. For example, if you report on the use of a personnel or payroll related expense, it cannot also be tied to dollars used in applying for PPP loan forgiveness. Essentially, a practice cannot ‘double-dip.’

Initially, reporting was set to begin back in the summer of 2020, which was then pushed to the fall of 2020 and then again to Jan. 15, 2021. However, because of updated legislation and a change in administration, reporting had been delayed even further. In late June 2021, the reporting requirements were finalized, and the reporting portal is now open to many, depending on when funds were received (see chart).

For all recipients of the fund, it is important to continue to monitor this process so that a reporting deadline is not missed. To stay on top of this process, the HHS has been updating its site (www.hhs.gov/coronavirus/cares-act-provider-relief-fund/reporting-auditing/index.html) with current regulations.

 

Audit Requirement

One stipulation, not known to many, is that a government single audit is required if the combined federal funds (PRF and other federal assistance) received were more than $750,000. Note that PPP funding does not count towards this total.

A single audit would be required of an organization that has $750,000 or more in federal awards. While typically, federal funding is awarded to not-for-profits and governmental organizations, the HHS PRF has opened many organizations, including for-profit medical practices, to these compliance requirements. If a practice has received combined federal awards though the Provider Relief Fund in excess of $750,000, a single audit will be required.

While the majority of relief programs under the CARES Act (such as the Paycheck Protection Program) are subject to reporting requirements, the PRF has its own distinct rules to navigate. If your healthcare practice took advantage of the PRF in any amount, it is highly encouraged that you speak with an advisor as soon as possible to fully understand the compliance requirements. Navigating federal compliance can be intimidating and confusing, especially if this is your first time doing so. Speaking with an advisor can demystify this process and help ensure that you understand the regulations.

 

James T. Krupienski, CPA, MSA, is a partner in the Healthcare Services niche for Holyoke-based Meyers Brothers Kalicka, certified public accountants and business strategists; (413) 536-8510; www.mbkcpa.com

Home Improvement Special Coverage

Summer Special

Andrew Crane says the Home Show helps contractors fill their pipeline with future work.

Even though they’re busy now, Andrew Crane says the Home Show helps contractors fill their pipeline with future work.

By Mark Morris

In the old days — prior to the pandemic — when homeowners wanted to make improvements to their property, they called several contractors for competitive bids. Once a contractor was selected, the job would start shortly after that.

Since the pandemic, those days are long gone. Contractors are busier than ever, and building materials have been affected by worldwide supply shortages and price hikes. Now, homeowners seeking a contractor can leave a phone message, but may not receive a call back.

For those reasons and many more, the Home Builders and Remodelers Assoc. of Western Massachusetts is staging a “special summer edition” of the Western Mass Home & Garden Show, usually held each March.

Andrew Crane, executive director of the association, told BusinessWest that, even though contractors are busy, the event (scheduled for Aug. 20-22) fills an important need.

“Many people will research their home project online, but at some point they need to see and touch the products they want and speak to professionals who can get the job done,” Crane said. “The Home Show allows them to move the project forward and not wait for a callback.”

The Home Show also works for contractors because it allows them to fill their project pipeline with future work.

“While most contractors are straight out right now, many don’t know what their business will be like in the coming fall and winter months,” Crane said.

By labeling it a “special summer edition,” Crane made it clear this is intended to be a one-time event. Plans are full speed ahead for the 2022 Home Show in its traditional late-March timing. The summer show is a way to fill the void left when COVID-19 forced cancellation of the 2020 and 2021 editions of the Home Show.

The special edition will be a scaled-down version of the full show, running only three days instead of four and setting up in only one building at the Eastern States Exposition grounds. The smaller event will still look similar to past shows, with booths set up in the Better Living Center and several outdoor displays.

Chris Grenier, owner of Grenier Painting & Finishing, said he appreciates having any version of the Home Show this year.

“I’m very busy right now, but it’s well worth it for me to be at the show because I still need a steady stream of work that I can plan for in the months ahead,” he explained.

Chris Grenier says even a scaled-back show brings value to vendors.

Chris Grenier says even a scaled-back show brings value to vendors.

BusinessWest spoke with a few contractors who have found both short-term and long-term benefits from participating in the show.

Frank Webb Home in Springfield sells a wide range of kitchen and bath fixtures, as well as lighting. Manager Lori Loughlin said taking a booth at the Home Show is well worth the investment.

“We often see a 40% increase in business right after the Home Show,” Loughlin said. “Even though we’re in a busy time right now, that can change, so we want people to keep us in the loop when they plan their kitchen and bath projects in the future.”

For the last five years, Gisele Gilpatrick, project manager for Pro-Tech Waterproofing Solutions in Chicopee, has chaired the Home Show organizing committee. Her company has always done well at the event.

“It’s a chance to meet people one on one and for them to collect business cards,” she said. “People will often call us six months to a year after the show to say they are ready to fix their wet basement.” She also said it’s not unusual to hear from people up to five or six years later.

When Gilpatrick meets people at the Pro-Tech booth, they often share photos with her, but they are not of children and pets. “They bring us pictures of their basements and say, ‘this is what my nightmare looks like,’” she said, adding that an interesting dynamic happens when someone describes the specifics of their wet-basement problem.

Gisele Gilpatrick says the lingering pandemic has forced show organizers to constantly reassess safety protocols.

Gisele Gilpatrick says the lingering pandemic has forced show organizers to constantly reassess safety protocols.

“One person might be telling us their story, and others who overhear become interested in the conversation because they have similar problems in their basements,” she said. “The next thing you know, a group of people are gathered around our booth.”

 

Safety First

While gathering at a booth can be good for business, this year, people will need to take social distancing into consideration when they congregate. The emergence of the Delta variant of COVID has show organizers making constant adjustments to their safety protocols.

“In planning the show, we’ve gone back and forth from wearing masks to not wearing masks as mandates keep changing, so it won’t be a surprise if they change again,” Gilpatrick said.

The maintenance staff at the Exposition grounds have boosted their protocols with more frequent surface cleaning during the show. They have also strongly encouraged people to wear masks. Crane advised, “if you are at all uncomfortable, wear your mask.”

Despite all that, Gilpatrick believes it’s worth attending the show, and for some, the scaled-down version might be easier to navigate.

“The crowds at the March Home Show can be overwhelming for some people,” she said. “This edition of the show will be easier to get around, and we will still have lots of quality exhibitors.”

Lori Loughlin says finding a contractor can be difficult right now

Lori Loughlin says finding a contractor can be difficult right now, and the Home Show can help make those connections.

As people have stayed closer to home for the last 18 months, many have set aside the money they would normally have spent on vacations and going out, and are using those funds instead to make improvements to the inside and outside of their homes, a trend Loughlin said is far from over. “People who are planning home projects now have been looking at their houses for a year and a half, and they are ready to make some changes.”

Crane emphasized the importance of planning and noted that the combination of busy contractors, shortages of certain building materials, and difficulty finding enough laborers all contribute to projects taking more time than in the past.

“Plan as far ahead as you possibly can,” he said. “I don’t want to scare anyone from doing a project, but planning is more important than it’s ever been.”

Grenier said good planning starts with recognizing that everyone is busy right now. “If folks go to the Home Show looking to make an interior improvement, they should plan it as a winter project. If it’s an exterior project, plan for next spring.”

Crane agreed. “The days of getting prices from four or five contractors are going away. If you talk with a contractor who gives you a reasonable price and you have a comfort level with them, sign them up.”

Loughlin said just finding a contractor to start a project is now more challenging. “The Home Show gives people an opportunity to meet contractors they might not have known about who can help them. It’s a chance to meet contractors in person and establish a point person to contact.”

The real opportunity is moving past thinking about a project, to making it happen, she added. “I believe people will come to the Home Show because many are at the point where they’ve done all they can online, and now it’s time to broaden what’s actually possible.”

Crane also emphasized how the Home Show has become a social event. For a $10 admission, it gives people an inexpensive time outside the house. It also allows people to see and touch new products.

“For the low cost of getting into the Home Show,” he said, “you might see that one thing that completes the puzzle of putting together your project.”

Autos Special Coverage

A Different World

Ben Sullivan says an ongoing inventory crisis

Ben Sullivan says an ongoing inventory crisis has forced dealers to place late-model vehicles under the showroom lights.

Auto dealers are used to adjusting to changing economic conditions and fluctuations with the laws of supply and demand. But in recent months, they’ve had to contend with an almost unprecedented mix of challenges — from dwindling inventory to an historic shortage of used cars. There is no real consensus on just when ‘normal’ will return, but all indications are that it won’t arrive until at least the first quarter of 2022.

As they talked about the past 18 months and what they project for the next few quarters, area auto dealers sounded similar tones and eventually came back to the same word. They are all adjusting.

To be more specific, they’re adjusting to some conditions they’ve rarely, if ever, seen before, and all at once. Things like:

• Used cars populating the showrooms. Yes, there have at times been some higher-end used models or a 1930 Model A in the showroom for effect, but now, area dealerships are showcasing cars with ‘2019’ and ‘2018’ stickers on the windshield, out of necessity — because that’s all they have.

• Lots that are half, or more than half, empty. Inventories of new cars are at levels never seen before as factories, confronting an ongoing microchip shortage, struggle, unsuccessfully, to keep up with what has been steady or even better-than-steady demand because many consumers still have money to spend, and it’s burning a hole in their collective pockets. Meanwhile, used cars are also in short supply. Most dealers report total inventory (new and used cars) to be one-quarter to one-third of what would be considered normal, with many being able to count new-car inventory using just two hands — with a few fingers left.

• Factory ordering becoming the new way of doing business.

• A complicated used-car market that is finally starting to level off in some respects. Still, cars are hard to find, dealers are going to great lengths to find them, and they must be careful not to pay too much and risk watching the market change quickly and profoundly.

• Even some workforce issues. Indeed, dealerships are not immune to the challenges facing businesses in seemingly every sector when it comes to hiring and retaining workers.

Add it all up, and it’s been a year described, alternately and by different people, as ‘interesting,’ ‘challenging,’ and ‘frustrating.’

“We went from trying to jump-start the auto industry after COVID happened — we had these great incentives and offers for customers who maybe weren’t in the market to incentivize them to buy a car — to now not even having the inventory levels to support that. It’s been a wild ride.”

“It’s an interesting world out there, that’s for sure,” said Ben Sullivan, chief operating officer for Balise Motor Sales, noting that, over the past 18 months, dealers have had all sorts of challenges thrown at them, from the sudden standstill after COVID-19 hit to the current situation where they simply don’t have enough cars to sell.

Carla Cosenzi, president of the TommyCar Auto Group, which includes Northampton Volkswagen, Country Nissan, Country Huyndai, Volvo Cars Pioneer Valley, and Genesis of Northampton, agreed.

“We went from trying to jump-start the auto industry after COVID happened — we had these great incentives and offers for customers who maybe weren’t in the market to incentivize them to buy a car — to now not even having the inventory levels to support that,” she said. “It’s been a wild ride.”

Moving forward, the $64,000 questions concern how long this period of extreme adjustment will continue, and what things will look like when it does.

There is no real consensus on the answers, but most believe it will be well into 2022, and perhaps a year or more from now, before the dust fully settles and the lots at area dealerships start to look like they did back in early 2020, when the challenges were much different and there were … too many cars.

Mike Kuzdzal says his lot in Chicopee has historically boasted more than 400 total vehicles, new and used. Now, there are often fewer than 100 of each.

Mike Kuzdzal says his lot in Chicopee has historically boasted more than 400 total vehicles, new and used. Now, there are often fewer than 100 of each.

“I think we’re at the bottom of the curve when it comes to availability,” said Sullivan. “From now through the fourth quarter, it will start to improve, but it won’t be back up to what we would call normal historical levels until June of next year.”

Cosenzi agreed. “They’re saying that October is when we’re going to see the inventory slowly start to trickle back in,” she said, noting that ‘they’ means the manufacturers. “We’re not going to get back to the same levels by then, and the expectation is that, by mid-2022, we’ll be back to something approaching normal.”

Mike Kuzdzal, general manager of Metro Chrysler Dodge Jeep Ram in Chicopee, concurred.

“The manufacturers are optimistic month over month that they’ll hopefully be able to ramp up production, but they just can’t keep up with current demand,” he noted. “As they make these cars and put them in an in-transit mode to us, we’re selling them before they even hit the ground.

“My hope is that, by the end of quarter one next year or the beginning of quarter two, we can get back to what we used to be,” he went on. “But the manufacturers are going to have to go double or triple time to get us there.”

 

A Different Gear

Kuzdzal told BusinessWest his dealership is one of many in the area that have placed signs on the property saying ‘we buy used cars’ — or words to that effect.

And, by and large, these signs are working, he said, noting that, just before he spoke with us, he bought a car off the street.

Such transactions, once quite rare, have become somewhat commonplace, said Kuzdzal and others we spoke with, noting, first, that COVID has yielded conditions whereby many families can do with at least one fewer car in the driveway, and, second, that prices for such vehicles have never been higher — and no one knows how long they’ll stay this high.

“Because of the pandemic and people working from home, a second or third car is not required,” Kuzdzal explained. “They’re sharing one car and saying, ‘I’m going sell my car at an all-time high and save that monthly payment, the excise tax, and insurance — and if I do go back to work, I’ll get back in the market.’”

Transactions like one he described are more than welcome, because traditional sources of used cars — everything from new-car trade-ins to rental cars — have dried up in dramatic fashion. So dealers have had to get creative.

“We’ve been acquiring a lot of vehicles from our service customers and past customers,” said Cosenzi, adding that her dealerships are now also buying essentially any car that comes off lease, where before they would cherry-pick. “We came up with a really easy five-minute trade process that has helped us generate quite a bit of used vehicle inventory.”

Overall, those signs offering to buy used cars or print, TV, and radio ads stating that ‘no one will pay more for a used car than we will’ are just part of the changed landscape in auto sales.

Carla Cosenzi (with her kids, Nico and Talia) is among many dealers expecting a return to something approaching normal by next spring.

Carla Cosenzi (with her kids, Nico and Talia) is among many dealers expecting a return to something approaching normal by next spring.

The dramatically lower volumes of inventory, used cars in the showroom, factory ordering, and essentially selling cars long before they reach the showroom, or even leave the factory, are other components of this altered state, one in which dealers say business is still solid in many respects, but altogether different.

Inventory is perhaps the biggest issue, and it has changed the landscape in all kinds of ways, the most noticeable being the lonesome lots at area car stores. The dealers aren’t used to it, and neither are local residents.

Indeed, Sullivan noted that more than a few people have asked if Balise has divested itself of the massive Chevrolet dealership on West Columbus Avenue. That Chevy store is quite visible from I-91, especially the ramp leading to the South End Bridge, which means people can see — or, in this case, not see — the rows of vans and trucks that have historically populated the south end of the property.

“Every single car that comes in is sold the day it lands there,” he said, adding that this phenomenon helps explain the bare pavement and put the inventory problem in perspective.

But not as well as some of the numbers offered by the dealers we spoke with.

“Where we normally run with 350 to 450 new cars and maybe 150 used cars, now we’re down to south of 100 of both, so we’re at a quarter of our running inventory,” Kuzdzal said.

Sullivan noted that the Balise family of dealerships includes more than a dozen makes, foreign and domestic, each one having inventory issues that have fluctuated over the past several months, with some doing better now than they were in the spring and others still struggling. He noted that, at the huge Honda store on Riverdale Street in West Springfield, there are normally 250 new cars on the lot. One day a few weeks ago, there were seven.

“It’s a situation we certainly haven’t seen, and each manufacturer will hit that low point at a different time. When Honda was out, Toyota had cars; when Toyota was out, Honda had cars. Each month, it kind of moves around, but at this point, heading into the fourth quarter, things will start to get back to what we call a more normal state.”

“It’s a situation we certainly haven’t seen, and each manufacturer will hit that low point at a different time,” he explained. “When Honda was out, Toyota had cars; when Toyota was out, Honda had cars. Each month, it kind of moves around, but at this point, heading into the fourth quarter, things will start to get back to what we call a more normal state.”

Cosenzi, who concurred with that assessment, noted that the TommyCar stable was helped initially by the fact that it traditionally keeps large volumes of inventory on its lots to offer consumers a wide selection.

“Our dealerships are usually crammed with cars,” she noted. “And that really helped us when this happened; we had a larger supply available to us when the chip shortage hit. Some dealers that only carry a one- or two-month supply ended up in trouble, while we carried a three and a half or four-month supply.”

 

Shifting Expectations

Given the shortages of microchips and other parts they’re facing, Sullivan said manufacturers, for the most part, are now only churning out the most popular, and sellable, variations of given models, and customers are adapting to this altered state.

“We’re used to carrying hundreds and hundreds of vehicles at every dealership, and customers are used to looking at 30,000 buildable combinations of a Honda Accord,” he explained. “They’ll say, ‘I want a blue one with a beige interior and this sunroof; I want this, but I don’t want that.’ The way the manufacturers have adapted through this is they’re only building the most commonly sold and fastest-churning vehicles that they have — they’re only doing certain trim levels.

“You’d think that customers would be mad,” he went on. “But they actually seem relieved. They’re saying, ‘OK, that’s the way they’re going to come in; I’ll take that one.’ Customers have been unbelievably accommodating, saying, ‘I really wanted a red one, but I guess a black one is OK.’”

Kuzdzal concurred, and noted that, in most ways, it’s easier to sell the few cars that the dealers do have on their lots.

“The consumer is coming in with his or her defenses down,” he explained. “They know it’s a tough time to get cars, and if we have it, they should buy it. If they don’t, we’ll sell it to the next person, so that makes the negotiations much easier.

“It’s never been like this,” he went on. “It’s a very comparable time to when we had the gas issue, when we spiked over $5 a gallon. But it has not slowed business down like it did then; it’s a different time, and we have to react to what’s coming our way. Inventory is at an all-time low, used cars are at an all-time high as far as value is concerned, and people are taking advantage of that.”

In addition to using that word ‘adjusting,’ all those we spoke with inevitably came back to that other word you hear and read so often these days — normal.

Some spoke of what is obviously a new normal, while others speculated on when and even if things would return to what used to be the norm.

But Sullivan spoke for everyone, and put things in their proper perspective, when he said, “I can’t wait to return to the old normal.”

Just when that will happen is anyone’s guess, but it seems certain that it can’t be a short drive from here.

 

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

Cannabis Special Coverage

Growing Concerns

Meg Sanders says the state’s onerous regulatory hurdles have made the cannabis space an unfair playing field

Meg Sanders says the state’s onerous regulatory hurdles have made the cannabis space an unfair playing field, especially for smaller shops and social-equity applicants.

Everyone has seen the dispensaries and other cannabis businesses sprouting up in communities across Massachusetts — and the long lines of customers often stretching out the door. And they might think this business is easy money. But that’s far from the truth, thanks to an onerous tax situation, the illegal nature of the product on the federal level making it tough to enlist financial and other partners, and the slow march from stigma to acceptance of this still-new industry. All of that, however, could be changing, although it will take federal action to loosen some of those shackles.

Meg Sanders is a cannabis-industry veteran, most notably in Colorado, the nation’s first regulated market for legal cannabis. So she’s no stranger to the growing pains the industry is now dealing with in Massachusetts.

But as a local business owner — as CEO of Canna Provisions in Holyoke and Lee — she’s frustrated by them, too.

“We’re limited on what we can do with advertising, and the amount of product we can sell to a customer at a time,” she said, citing just two examples of regulations set forth by the state’s Cannabis Control Commission (CCC).

“The whole idea was to regulate cannabis like we regulate alcohol, and we’re not doing that. Actually, they’re going way above and way over the top, and I don’t think that’s helpful to the industry. I don’t think it’s helpful to individual businesses, and it’s definitely, in my opinion, not in the spirit of the CCC, which is supposed to promote social-equity and economic-empowerment applicants. But the bar for entry is really high, and the bar to stay out of trouble with the CCC is really high.”

“The whole idea was to regulate cannabis like we regulate alcohol, and we’re not doing that. Actually, they’re going way above and way over the top, and I don’t think that’s helpful to the industry.”

In other words, despite the number of cannabis businesses currently operating across Massachusetts — 267 and rising every week — this is a tough field to enter and a tougher one to succeed at, Sanders told BusinessWest.

“I think of people who are bootstrapping, mom-and-pop stores, teams that are working with a limited amount of cash, and it’s not a level playing field,” she went on. “And a lot of things we worry about in this industry are things that really do not matter. The amount of money this industry spends on packaging alone, that just goes in a landfill, is awful, and it’s driven by these rules and regs — it has to be childproof, it’s got to have 57 warning labels on it. I feel ethically horrible about the mounds of packaging in landfills. And the burden it puts on mom-and-pop manufacturers who are trying to make a really cool chocolate bar and the expense that’s going into that packaging … it’s really tricky.”

It doesn’t help, she added, that many state regulations can be challenging to interpret, mainly because the CCC is going through the same growing pains businesses are.

Scott Foster says federal decriminalization of cannabis has gained momentum

Scott Foster says federal decriminalization of cannabis has gained momentum, but the timeline is still uncertain.

“I’ve seen this in other states — the agency tasked with regulating and monitoring the industry has a very steep learning curve,” Sanders said. “One investigator will tell you one thing, and another investigator will tell you another thing. So they’re not always on the same page for specific rules.”

Many of those regulations address diversion of product, she noted. “We’ve spent millions of dollars building this business. The last thing we’re going to do is flush it down the toilet trying to sneak a pound out the back door. It’s just absurd.”

So are onerous background checks to get into the industry, keeping out some of the individuals — from communities that have been inordinately affected by the Drug War — who should be able to enter and prosper, she added. “Regulators and business owners should be partners to build a better business and correct things that need correcting, understanding everyone is doing their best.”

Those challenges are strictly state-level, but others on the federal level are just as burdensome, and boil down to the fact that the U.S. government still classifies cannabis as an illegal controlled substance. That means most banks and credit unions have avoided doing business with cannabis operators, though that’s slowly changing.

“In the early days, there weren’t a lot of professionals willing to take the career risk to enter the industry, so it was hard to find talent to come in and help grow the business. But, again, you’re starting to see that shift as more states legalize and you see the social proofs play out.”

“The federal illegality is a big challenge, and it doesn’t stop with the banking issue,” said Patrick Gottschlicht, chief operating officer of Insa. “That’s been extremely detrimental to us, but that carries across to other companies that we can work with — payroll processors, ERP [enterprise resource planning] companies, any big national or international software companies, accounting firms, security vendors … they can’t work with us because of that federal illegality.”

That has started to shift as more professional services and banks are opening up to this industry, though many still won’t, and many that do are startups themselves, with less at stake, said Peter Gallagher, Insa’s CEO.

“There’s no playbook for this industry,” he added. “There’s been a lot of trial and error to get to where we are. In the early days, there weren’t a lot of professionals willing to take the career risk to enter the industry, so it was hard to find talent to come in and help grow the business. But, again, you’re starting to see that shift as more states legalize and you see the social proofs play out. People’s friends are getting into it, talking positively about it, and they see the success of the industry, and you’re seeing more willingness to work with cannabis.”

Some bills have been introduced in Washington to, if not legalize cannabis, at least decriminalize it.

“Those bills would make it easier for us, and also de-risk the industry around the margins for a lot of partners,” Gallagher said. “The trend is definitely there, but in what time frame will that happen? From our perspective, it’s been happening a lot faster than we ever expected. When we got into this, we thought the legal conversation would take 20 or 30 years to play out.”

 

Taking No Credit

Sanders is hopeful, too. “At the federal level, we have big challenges. We can’t even take credit cards. That’s so silly. We can take a debit card and cash, and that’s it. That alone would be a really big help.”

Scott Foster, a partner at Bulkley Richardson and one of the attorneys in that firm’s cannabis practice group, believes sentiment is growing that Congress will act sooner rather than later on some degree of allowing banks into the cannabis space or remove the threat of federal enforcement against entities that partner with cannabis operators.

“That will help create some stability. And the biggest thing it’ll do is allow people to use credit cards at the facilities; it’s largely cash right now. If Congress changes that law, boom — you can use your Visa card, you can use your Mastercard. And the reason that you can’t now is not because Visa and Mastercard have a particular ethical or moral problem with it — they’ve just got a legal problem.”

Patrick Gottschlicht (left) and Peter Gallagher say cannabis is a much more challenging business than it seems — but it’s a rewarding one.

Patrick Gottschlicht (left) and Peter Gallagher say cannabis is a much more challenging business than it seems — but it’s a rewarding one.

Some federal bills have bipartisan support, he added, “but Congress has a lot of other things going on.” Still, with almost 40 states and territories having legalized medical cannabis and more than 20 giving the OK to adult-use cannabis, “I think the tide is definitely turning on this; it’s just a matter of how far it goes, and how quickly.”

Even without a change in the law, Foster explained, “the banking situation is getting better. We’re seeing some banks and some credit unions more willing to lend into the cannabis space now — much more than a couple years ago. They’re becoming more comfortable with lending for real-estate purposes — not for buying things, necessarily, but for buildout and for creating a space, including cultivation spaces. So that’s a change. A very small change, but the fact that it’s happening at all is a big deal.”

The other federal law cannabis operators want to see changed is Internal Revenue Code Section 280E, which severely limits tax deductions for business that deal in controlled substances prohibited by federal law. In short, businesses can deduct the cost of goods sold, but are not allowed any other deductions or credits on their return, including for wages.

“The taxes are crushing — you can’t deduct wages, rent, or other ordinary deductions. Most of these companies are looking at an effective tax rate of 70% to 90% in that, of their profit at the end of the day, 70% of it goes to pay federal taxes.”

“The taxes are crushing — you can’t deduct wages, rent, or other ordinary deductions,” Foster said. “Most of these companies are looking at an effective tax rate of 70% to 90% in that, of their profit at the end of the day, 70% of it goes to pay federal taxes. And this is after they pay state and local taxes. So the federal government is making a lot of tax money off of cannabis companies across the U.S.

“It’s been challenged multiple times in multiple states,” he went on, “and every tax court and every appellate court has said, ‘Congress can change it, but they were unequivocal in what they said.’ It’s a completely constitutionally valid statute.”

Decriminalizing cannabis federally would neuter the impact of 280E on the industry, which would be massive news for cannabis businesses that are already paying higher-than-average state taxes, while their host communities get a cut of between 3% and 6% as well.

But decriminalization would open many other doors as well, like broadening the market for insuring these businesses.

“There’s a risk that your insurance company could, almost at any point, say, ‘well, what you’re doing is a violation of federal law; therefore, we’re not going to insure you,’” Foster said. “The companies are getting insurance — they’re required to get insurance by the CCC — but they’re not the traditional companies; they’re not the Allstates or the companies you see advertising. They’re smaller, specialty, boutique insurance companies that have figured out it’s worth the risk to them to get into that space because the premiums are appreciably higher than they would be for a comparable business.”

So, again, the lack of federal legislation to decriminalize cannabis is increasing the cost of doing business, he went on. “If that happened, I think the cost of insurance would go down because you’d have more competition overnight in the space.”

Another barrier to continued growth that is slowly coming down is stigma surrounding the products themselves.

“For decades, it was drilled into people’s heads that this was a bad thing,” Gallagher said. “It’s going to take time to change that, and the most powerful tool is social proof and people seeing their friends and relatives using it to either treat various ailments or enhance their lifestyle; they see they’re successful, healthy individuals, and this is just a way to improve their lives. But I think it’s going to take time.”

For example, Gottschlicht added, “we have a bedtime edible to help you sleep, and we’ve seen people who were non-cannabis users start using that and come into the space because of that. It’s incredible how many people have gotten off standard pharmaceuticals and gone to half a gummy every night. The feedback has been, ‘it doesn’t make me groggy; it doesn’t give me the melatonin hangover I’ve gotten in the past. I feel normal in the morning, and it helps me sleep through the night.’”

Hearing those testimonies from friends and family is often how the stigma barrier falls for people who have been nervous about stopping by, he noted. “They think, ‘hey, there’s some good benefit to this.’ Or as an alternative to opioids after surgery — we’ve had a lot of people come in who just don’t want to take opioids for pain after surgery; they want to try cannabis because it’s not as addictive as some of the opioids out there.”

Sanders agreed. “I personally think the biggest move you can make to convert non-cannabis users to cannabis is this one-on-one experience, people telling people, or people coming in and finding relief from something — maybe sleep issues or aches and pains. And when you convert one person, they tell someone, and then they tell someone.”

 

Business Is Blooming

It’s been fulfilling to see the industry grow, Foster said — not to mention a boost to his own professional practice.

“The big uncertainty now is what consolidation in this industry is going to look like, and when is it going to happen. Everyone knows big players are going to come in and buy up companies and create brands that stretch across the nation; it’s already occurring, though not a lot … yet.”

But as more investors become comfortable with industry — there’s that idea of breaking through stigma again — that consolidation will happen, he went on. Drawing on the beer industry, he noted there’s no Anheuser-Busch in cannabis yet — it’s all microbreweries, so to speak. But even when large, national companies spread across the space, there will always be room for the boutique experience, for small companies that continue to research and promote the effects of new and different strains.

Research that is not currently happening to the degree it could because much research, especially clinical research at universities, is dependent on … wait for it … federal funding.

But once that research takes off and the cannabis industry escapes the shackles of federal illegality — a development that industry players generally agree will happen at some point — the products will continue to become more legitimized in the public eye, and the potential customer base will expand.

“People are asking, is the industry tapped out? No, I’m not seeing that,” Foster said. “Every business that opens up has a line out the door, and every facility that opens up can sell everything it makes. So, we have not reached a point of saturation by any means.”

That ever-expanding competition is another challenge, Sanders said, but one that should benefit all players because it further legitimizes the products in more people’s minds. But it also means individual businesses need to work harder to stand out. Canna does that with a strong focus on the individual experience and locally sourced products — including its own brand, Smash — with interesting, local stories behind them.

“There’s more good people than not in this space, and we owe it to consumers who are cannabis-curious to put our best foot forward and make sure they have as much information about our products as possible, so they don’t have any unexpected reactions,” she said. “Our commitment is to great products we can tell a story about, that we understand and respect and can get behind and provide the best experience we can possibly provide, and educate our customers.”

Insa, which has a production facility in Easthampton and four dispensaries across the region, including a flagship store in Springfield, has also expanded nationally, with a production facility in Pennsylvania selling to about 100 dispensaries and a Florida license to build a production site and medical dispensaries. And Gallagher embraces the growing competition in all those regions.

“The way we look at it, this is a much bigger industry than exists today,” he said. “If we all do a good job and operate responsibly and create good quality products, it will encourage more people to enter the industry and experiment and try it, and this will get much, much bigger. A rising tide lifts all boats, and as long as you have good, responsible players in the market, it’s going to be a benefit to everyone.”

Still, he added, “it’s a tough business. One of the common misperceptions is, people think it’s going to be easy. But it’s probably the hardest thing I’ve had to do. You have to be on it every day. And when you’re dealing with any biological product, the number of variables to control are immense. So it’s extremely challenging.

“But it’s been great,” he added. “The relationships we’ve built along the way have been fantastic. I wouldn’t change it for anything.”

Except, of course, for some pesky federal laws.

 

Joseph Bednar can be reached at [email protected]

Features

Moving Up to the Show

 

documentary on his one-man show, Yield of Dreams, Charlie Epstein

For the documentary on his one-man show, Yield of Dreams, Charlie Epstein visited the actual ‘field of dreams’ stadium in Iowa, a visit he said was inspirational on many levels.

Charlie Epstein joked that he has more people working for him on his one-man show — Yield of Dreams: A Financially Entertaining Experience — than he does at the financial-services company he founded, now part of Hub International.

Only … it’s no joke.

Indeed, over the past 21 months or so, Epstein, known to many as the 401k Coach, has hired comedians, directors, stage managers, animators, and more (the cast of supporters keeps growing) as he prepares to bring his show to the stage — in this case, the Northampton Arts Center — on Aug. 26 and 27.

That show, which has been delayed in some respects by COVID-19, will indulge both of Epstein’s passions — acting and financial advising, both of which he’s been doing for decades now.

The acting? That’s been a passion since childhood, and a diversion that was a big part of his life for more than a dozen years. He’s done everything from standup comedy in New York to another one-man show at the former CityStage called Solitary Confinement, in which he played seven roles.

The financial advising? That, too, has been a passion that has taken a number of forms, from books — Paychecks for Life and Save America, Save! — to a podcast to a video series.

Bringing the two worlds together has become yet another passion for Epstein, one that will put him on a live stage for the first time since he did an off-off-Broadway show just before 9/11.

After the final production of that show, he said a voice inside him told him it was time to leave the stage and move onto other things, including the books and the 401k Coach entrepreneurial endeavor.

“I’d pretty much accomplished everything I wanted to,” he recalled of his acting career. “I was done.”

Turns out, he was only done for a while. OK, a long while.

What brought him back was a desire to present his message in a new, different, and more entertaining way, and in the process, spread the message and attract new customers.

“We’re calling this a financially entertaining experience,” he said, “because the show asks the question: ‘what did you want to be when you grew up? And what happened to that promise?’ Everyone made a promise to themself growing up, only how many people kept the promise? My promise to myself was I always wanted to be an entertainer, and I kept the promise and figured out to successfully navigate living in both worlds.

“Most people are not pursuing their life’s passions — they are stuck in a job that is less than fulfilling, working for a paycheck, hoping one day they will finally get to do what they have always dreamed of.”

“Most people are not pursuing their life’s passions — they are stuck in a job that is less than fulfilling, working for a paycheck, hoping one day they will finally get to do what they have always dreamed of,” he went on. “In this show, I’ll bust your myths about money that hold you back from living the life you have always dreamed of.”

To do so, he’ll draw on some of his own real-life experiences, specifically with his acting career.

“I had basically taken three to five months off a year from 1988 to 2001,” he told BusinessWest. “And I discovered that the more time I took off from my financial business to pursue my acting and entertainment career, the more money I made every year.”

As noted, this show has been in the works for more than two years now and was inspired by a desire to return to the stage. Epstein said he met with Mike Koenig, serial entrepreneur, author, podcaster, and founder of the Superpower Accelerator, in the early fall of 2019 to discuss his plans.

“He told me that I should be like Leno and Letterman and all the great comics who have shows and hire my own comedy team to help me write these ideas that I had,” Epstein recalled, adding that, in exchange for being named producer of the show, Koenig said he would find the comedians — which he did.

“I flew out to La Jolla, California, and holed up for two days in a condo he [Koenig] has overlooking the Pacific,” Epstein went on. “I was there with three comedians, and I basically acted out all the ideas I had in my head. And with those three comedians, we crafted the outline of the one-man show. Then I went home and wrote 168 pages from October to Thanksgiving, then went back out to California in January for another two days of going over things. Then COVID hit, and we spent the next three or four months on Zoom, editing, writing, and acting things out.”

Subsequently, he has hired a director, a stage manager, a lighting designer, animators, and more to bring the show to life. He also traveled across the country for the filming of a documentary on the making of the show, created by Emmy Award winner Nick Nanton. There were location shoots in a variety of settings, including a mountaintop in California, New England, and the actual ‘field of dreams’ in Iowa, the one made famous in the movie starring Kevin Costner, a visit that Epstein said was inspirational on a number of levels.

“It’s like a shrine — it was fantastic being there,” he said, noting that he rented out for the field for two days so he and his crew could film at dusk. “I finally got to do what I always wanted to do, like James Earl Jones — walk into that cornfield like a ghost.”

Epstein, who is now spending several hours a day rehearsing, will perform Yield of Dreams: A Financially Entertaining Experience twice at the Northampton Arts Center, on Aug. 26 and 27 at 7 p.m. There is no cost to attend those shows; seats can be reserved, and that aforementioned documentary can be viewed, by downloading the app at yieldof dreams.live.

After those shows … the plan is to take the show on the road, as they say.

“The goal is to go city to city, tour the country, and teach people that they, too, can achieve their dreams,” he said, adding that the timing for such a show is ideal because many people have been cooped up during COVID, thinking about the present — and the future.

“They’re thinking, ‘I’m working in a job I can’t stand for a paycheck, and I’m miserable. Why don’t I just go for my dream?” Epstein said. “That’s what this show is. It’s me living my passion and trying to be an inspiration to other people.”

 

—George O’Brien

Community Spotlight

Community Spotlight

By Mark Morris

Bob Boilard says infrastructure improvements, including a broadband plan for the town, have moved forward during the pandemic.

Bob Boilard says infrastructure improvements, including a broadband plan for the town, have moved forward during the pandemic.

 

Robert Boilard credits people in town working together as the reason Wilbraham has come through the pandemic so far with minimal impact on the community.

“We incorporated our protocols early and have been very fortunate that most people have remained safe from COVID,” said Boilard, who chairs the Wilbraham Board of Selectmen.

Officials from the Police and Fire departments, as well as the town’s public-health nurse, provide weekly updates to the selectmen of the number of positive cases, illnesses, and hospitalizations so they can continue to closely monitor the community’s health.

Boilard pointed to a new DPW garage and a storage facility for the Parks and Recreation department as two projects the town was able to complete during the pandemic. As a community that has received funds from the American Rescue Plan Act (ARPA), the board is hoping to use the money on water-infrastructure projects and expanding broadband internet.

“We have a master plan to install broadband throughout Wilbraham,” Boilard said. “This is a project that will be ongoing for the next few years.”

Another big project on the horizon involves a new senior center. On Oct. 18, Wilbraham will hold a special town meeting to discuss building the facility behind Town Hall. Paula Dubord, the town’s director of Elder Affairs, said she and others have led a 10-year effort for a senior center that can better accommodate the community’s growing senior population.

“Our current location is in a lovely building, but the space is only 3,840 square feet,” Dubord said. “With more than 4,000 seniors in town, it’s just too small.”

The drive for a new senior center began in 2012 with a study committee, which concluded the existing senior center did not meet the town’s needs, even at that time. Next, a feasibility committee was formed and brought in an architect to do a deep dive on what made sense for a new facility. After seven years and consideration of nearly 40 different sites in Wilbraham, the feasibility study recommended building a new structure on municipally owned land behind Town Hall. October’s town meeting will give residents a chance to vote on that recommendation.

“Our current location is in a lovely building, but the space is only 3,840 square feet. With more than 4,000 seniors in town, it’s just too small.”

There were some in town who pushed for locating the new senior center in an available former school. Dubord said the senior center has been located in old schools twice before, and it’s an approach that just doesn’t work.

“The experts who took part in the feasibility study told us a new building was a more practical way to meet the current and future needs for Wilbraham residents,” he said.

 

Booming Population

When the study committee began its work in 2012, members looked at the potential growth in the over-60 population in Wilbraham.

“We projected that, by 2025, nearly 40% of our town — with a population of nearly 15,000 — will be considered a senior,” Dubord said. “We are very close to that projection right now.”

As Wilbraham residents age, she added, many of them say they prefer to stay in their own home or move to one of the 55+ communities in town.

In its current location, more than 100 residents visit the senior center every day. Dubord emphasized that the real goal of the center is to keep people socially connected. Last March, when the pandemic forced the center to shut down, she and her staff quickly found new ways to stay connected with local seniors.

“We immediately started grocery shopping for people and picking up essential items like masks and toilet paper — both of which were hard to get in the beginning — as well as their prescription medicines,” she said.

The staff at the center put their full focus on meeting the needs of Wilbraham seniors, she added. “Because everyone was isolated, we did lots of phone check-ins with people to keep them engaged.”

In the spring, when vaccines first became available for people 65 and older, Dubord and her staff helped seniors sign up online to receive their shots when the state made them available at the nearby Eastfield Mall in Springfield.

“The registration process was not easy for seniors to complete, so we became like vaccination headquarters,” she said. “Because we had done a number of them, our staff was able to quickly get people registered for their shot.”

Dubord estimates they helped nearly 400 residents sign up for the initial vaccine offering. Later, the senior center hosted its own vaccine clinic run by staff from the Public Health and Fire departments.

Grace Barone says Wilbraham businesses are looking forward

Grace Barone says Wilbraham businesses are looking forward to getting back to some semblance of normalcy.

“Through all those efforts, we are confident that everyone who wanted to get a shot was able to get one,” she said.

Like many senior centers in the area, Wilbraham also offed a grab-and-go lunch program when it could not open the center for meals. “The real plus to the grab-and-go was it introduced us to people we’ve never seen before at the senior center,” Dubord said.

Happy to open the doors at the senior center almost three months ago, she said having someplace to go gives people a purpose and plays a key role in our health as we age.

“Many of our seniors live alone, so the center is important because it gives them access to vital community services and for the social connections they make,” she noted. Indeed, according to a Harvard Health study, the negative health risks of social isolation are comparable to smoking and obesity, increasing mortality risk by up to 30%.

Wilbraham at a glance

Year Incorporated: 1763
Population: 14,868
Area: 22.4 square miles
County: Hampden
Residential Tax Rate: $22.96
Commercial Tax Rate: $22.96
Median Household Income: $65,014
Median Family Income: $73,825
Type of government: Board of Selectmen, Open Town Meeting
Largest Employers: Baystate Wing Wilbraham Medical Center; Friendly Ice Cream Corp.; Big Y; Home Depot; Wilbraham & Monson Academy
*Latest information available

While a new senior center can address the needs of Wilbraham’s growing elder population, Dubord said the plan is for the new building to also house services for veterans in town.

“There are benefits for the new center beyond seniors,” she explained. “The larger space can be used by Boy and Girl Scouts, as well as women’s groups or other organizations in town.”

 

Moving Forward

Gradual easing of COVID-19 mandates is also good news for Wilbraham businesses. Grace Barone, executive director of East of the River Five Town Chamber of Commerce, noted that, like everyone else, Wilbraham businesses are looking forward to something resembling business as usual once again.

She pointed to a recent annual meeting of the chamber which more than 130 members attended in person while others joined remotely as an example of gradually getting back to attending events while still staying safe.

“The chamber’s golf tournament at the end of September is another way to get back to networking and taking advantage of the outdoors while we can,” she added.

New to her role at the chamber, Barone has been in the job since late June after working with the Keystone Commons retirement community in Ludlow for the last five years.

“I’m hoping to take what we’ve learned from the past 18 months to help our businesses succeed going forward,” she said. “It’s going to take some time, but we can get there together.”

Boilard shares Barone’s optimism about the future.

“It’s awesome to see how well everyone works together,” he said. “From boards to community groups, they are all focused on making Wilbraham a better place to live.”

Home Improvement

The Clock Is Ticking

 

With state financing now in place, construction is expected to begin in early 2022 on a $29.9 million project to transform the landmark Mill 8 at the historic Ludlow Mills complex into 95 mixed-income apartments for adults 55 and older and a center for supportive healthcare services, Westmass Area Development Corp. and WinnDevelopment announced.

The Massachusetts Department of Housing and Community Development recently announced new tax credits and subsidies to support the next phase of the ambitious adaptive-reuse project, focusing on the section of the 116-year-old complex that contains the clock tower shown on the town’s seal. The Mill 8 project follows the successful transformation of Mill 10, which offers 75 units of mixed-income housing for adults 55 and older.

“There is a three to five-year wait for vacancies in the Residences at Mill 10, proving how vitally important it is to deliver additional quality apartment homes to seniors in and around Ludlow,” said Larry Curtis, president and managing partner of WinnDevelopment. “The continued support of the Baker-Polito administration was the last piece of the financing puzzle needed for us to begin the next phase of work to preserve and revive one of the town’s most treasured historic assets.”

Overseen by WinnDevelopment Senior Vice President Adam Stein and Senior Project Director Lauren Canepari, the project has received enthusiastic support from local, state, and federal officials representing Ludlow. The town has committed state and federal money for several key infrastructure improvements, including the ongoing construction of Riverside Drive and the addition of a wastewater pumping station for the area. In addition, the National Park Service has committed federal historic tax credits to the effort.

Support from the Baker-Polito administration includes federal and state low-income housing tax credits, as well as money from the state’s Affordable Housing Trust Fund, Housing Stabilization Fund, and HOME program.

“As Westmass continues its redevelopment of the Ludlow Mills, we are excited to see the long-awaited Mill 8 transformation begin. Westmass will also benefit from this as we will retain the majority of the first floor for commercial development.”

The 95 apartments to be built inside Mill 8 will cater to a wide range of incomes, offering 43 affordable units for rent at 60% of area median income (AMI), 40 market units, and 12 extremely low-income units available at 30% of AMI. The first phase of the project, the Residences at Mill 10, is 88% affordable.

“The cost of housing is one of the single greatest challenges facing our Commonwealth, and that challenge has been amplified dramatically by the pandemic,” state Sen. Eric Lesser said. “This development will be a welcome addition to Ludlow with 95 new affordable housing units. It will unlock opportunity and alleviate some pressure for housing access right here in Western Mass.”

Gov. Charlie Baker added that “projects like Mill 8 that bring mixed-unit, affordable housing to the community are an important part of the solution required to address the Commonwealth’s housing crisis, and our administration is proud to support them. Unlocking additional opportunities for community and economic development across the state will require more housing of all types in every corner of Massachusetts, and this project stands as an example of how we can continue making progress toward our goals.”

Mike Kennealy, secretary of Housing and Economic Development, argued that the Commonwealth’s housing crisis will be resolved only by the production of more housing — and through more projects like Mill 8. “Thanks to their many partners and the town of Ludlow, these new units will be specially designed for families of all incomes and with supportive services to help people stay in the community they call home.”

In addition to modern apartments, the project has partnered with WestMass Eldercare to create a 5,000-square- oot Adult Day Health Center inside the building that will provide on-site, enhanced supportive services to residents of Mill 8 and Mill 10, including nurse visits, a service coordinator, healthy-living programming, and transportation to the nearby Ludlow Senior Center.

“I am proud to see the public and private partnership between federal, state, and local government with Westmass Area Development Corp. and WinnDevelopment to breathe new life into the iconic Mill 8,” state Rep. Jake Oliveira said. “ As the project enters its next stage, I’m excited to see the clock tower mill building that adorns our town seal to finally become fully functional once again.”

The redeveloped property also will contain common area amenities, including on-site laundry facilities, on-site management, a fitness room, a resident lounge, and several outside recreation areas to serve future residents.

“Since Westmass began this project over 10 years ago, it has always been a priority to get Mill 8 redeveloped,” said Antonio Dos Santos, board chair of Westmass Area Development Corp. “This building has the marquee presence of the entire mill complex, and we are excited that the transformation of this iconic building will be getting underway soon.”

Nearly 43,000 square feet of space on the first floor of Mill 8 will be available for lease to local businesses.

“As Westmass continues its redevelopment of the Ludlow Mills, we are excited to see the long-awaited Mill 8 transformation begin. Westmass will also benefit from this as we will retain the majority of the first floor for commercial development,” said Jeff Daley, president and CEO of Westmass Area Development Corp. “As we pull together different uses in the mills complex, housing is one of the priorities, and we are excited to partner again with WinnDevelopment with the continued support of the Baker-Polito administration.”

The design and construction of Mill 8 will meet the standards of Enterprise Green Communities (EGC), an environmental certification program for affordable housing that includes milestones for water conservation, energy efficiency, healthy materials, and green operations and management.

— By George O’Brien

Home Improvement

Target Acquired

The Baker-Polito administration recently announced it has established an ambitious greenhouse-gas (GHG) emissions-reduction goal for the next three-year Mass Save Energy Efficiency Plan. The goals, established as part of comprehensive climate legislation signed into law by Gov. Charlie Baker in March, are intended to help the Commonwealth meet its ambitious goal to reduce GHG emissions 50% below 1990 levels by 2030.

The GHG reduction goal for the three-year energy-efficiency plan, established in a letter issued by Energy and Environmental Affairs Secretary Kathleen Theoharides to Mass Save program administrators, builds upon the framework established in the administration’s 2050 Decarbonization Roadmap and 2030 Interim Clean Energy and Climate Plan. The goal requires the Commonwealth’s utility companies to pursue an ambitious emissions-reduction goal through Mass Save in a cost-effective and equitable manner while creating jobs and opportunities for economic development throughout Massachusetts.

“Massachusetts continues to lead the nation in ambitious clean-energy and energy-efficiency policies with programs like Mass Save, helping residents save money on their energy bills while making substantial progress on our climate goals,” Baker said. “The goals we are setting today will help spark innovative efficiency solutions and lead to significant reductions in harmful greenhouse-gas emissions to combat the effects of climate change.”

“In establishing this emissions-reduction goal, our administration is laying the groundwork for significant investments in energy-efficient infrastructure and job creation across the Commonwealth,” Lt. Gov. Karyn Polito said. “These investments will reduce air pollution in our cities and towns, create new economic opportunities, and lower energy costs for our residents and businesses across the state.”

The GHG reduction goal for the 2022-24 Joint Statewide Energy Efficiency Plan for electric utility companies requires the reduction of 504,955 metric tons of carbon dioxide equivalent (CO2e) emissions, while the emissions reduction for gas-utility companies requires the reduction of 335,588 metric tons of CO2e.

Gov. Charlie Baker

Gov. Charlie Baker

“The goals we are setting today will help spark innovative efficiency solutions and lead to significant reductions in harmful greenhouse-gas emissions to combat the effects of climate change.”

“Massachusetts remains a national leader in energy efficiency, but we continue to pursue innovative approaches to make our buildings more efficient, drive investment to our cities and towns, and help our state meet its ambitious target of net-zero emissions by 2050,” Energy and Environmental Affairs Secretary Kathleen Theoharides said. “The goals set today will not only help residents and businesses increase efficiency and reduce emissions, but also ensure that equity is a central priority in our efficiency programs as we continue to transition to a clean-energy future.”

The climate legislation signed by Baker requires both economy-wide and sector limits, which will be set first for 2025, then for 2030. The Mass Save program prepares three-year investment plans, one for gas programs and another for electricity and delivered heating fuels. Those plans include goals and reporting requirements for three sectors: residential, residential income-eligible ratepayers, and commercial customers.

The Mass Save energy-efficiency programs are funded by utility customers. All residents and businesses located in investor-owned utility territories in Massachusetts pay into a fund through their utility bill, which supports these programs. The three-year plan directs how these funds will be spent on financial-incentive programs for homes and businesses. The development, implementation, and evaluation of three-year plans is overseen by the Energy Efficiency Advisory Council (EEAC), which is chaired by the Department of Energy Resources (DOER). A resolution created by the EEAC this past March details the EEAC’s priorities for the upcoming three-year plan, as well as providing specific recommendations to support these priorities.

The letter sent by heoharides to the utility companies that administer the Mass Save Program details the goals and priorities for the 2022-24 energy-efficiency plans, which are currently in development and which must be voted on by the Energy Efficiency Advisory Council and submitted to the Department of Public Utilities (DPU) by Oct. 31.

It is anticipated that Mass Save will achieve the GHG emission-reduction goals by increasing the number of buildings retrofitted and weatherized each year, making significant investment in electrification of existing buildings to transition customers away from fossil fuels, reducing support for fossil-fuel heating incentives, phasing out LED lightbulb incentives, increasing equitable program investments in environmental-justice communities and low- to moderate-income households, and increasing workforce-development investments to expand diversity in the workforce. The goals build on the administration’s effort to promote long-term decarbonization in coordination with the EEAC and its priorities, such as promoting passive home adoption and air-source heat pumps.

“Energy-efficiency measures are the most cost-effective way for residents and businesses to lower their energy bills and to lower our greenhouse-gas emissions,” Department of Energy Resources Commissioner Patrick Woodcock said. “DOER looks forward to our continued partnership with the Mass Save program administrators and the EEAC to design a plan that meets this ambitious mandate.”

The final 2022-24 energy-efficiency plans, to be filed with the DPU in October, are required to be designed to achieve the GHG goals established in the secretary’s letter and should focus on programs that accelerate the market transformation needed to achieve net-zero emissions by 2050. The plan should reflect the GHG-reduction goals and include a performance-incentive mechanism that ensures that electric and gas utilities are incentivized to achieve these goals.

On March 26, Baker signed comprehensive climate-change legislation that significantly increased protections for environmental-justice communities across Massachusetts; authorized the administration to implement a new, voluntary, energy-efficient building code for municipalities; and allowed the Commonwealth to procure an additional 2,400 megawatts of clean, reliable offshore wind energy by 2027. Recognizing the significant impact of climate change on environmental-justice communities overburdened by poor air quality and disproportionately high levels of pollution, the legislation statutorily defined environmental-justice and environmental burdens, including climate change as an environmental burden.

The legislation also expanded Massachusetts Environmental Policy Act review to require an environmental-impact report for all projects that impact air quality within one mile of an environmental-justice neighborhood and required the Department of Environmental Protection to conduct a stakeholder process to develop a cumulative impact analysis as a condition of permitting certain projects.

Home Improvement

Survey Says

Home renovation spending has grown 15% in the last year to a median $15,000, according to the tenth annual Houzz & Home survey of more than 70,000 U.S. respondents. Higher-budget projects (with the top 10% of project spending) saw an increase from $85,000 or more in 2020, compared with $80,000 in the two years prior.

Kitchen projects are the most popular among renovating homeowners, and while median spending has been flat on these projects for the past three years, investment on major remodels of large kitchens jumped 14% to $40,000 in 2020 compared with $35,000 in 2019. The study also found that the busy renovation market will continue through 2021, with 56% of homeowners renovating or planning to renovate this year, the highest share since 2017 (52%).

“While the pandemic caused initial concern for the residential-renovation industry, many homeowners finally had the time and financial means to move forward with long-awaited projects in the past year,” said Marine Sargsyan, senior economist for Houzz. “This pent-up demand, along with other long-standing market fundamentals such as accumulated equity, will empower homeowners to continue investing in their current homes rather than face skyrocketing prices in the housing market.”

With homeowners homebound due to the pandemic in 2020, the share who reported that they had wanted to pursue a home renovation all along and finally had the time increased by six percentage points in 2020 (44%versus 38% in 2019), and remains the top renovation trigger. Wanting to do it all along and finally having the financial means also rose (as reported by 36% of homeowners compared with 34% in 2019). Meanwhile, 25% of homeowners claimed to have renovated instead of moving to find a home that fit their needs because it was the more affordable option. Surprisingly, remodeling to adapt to recent changes in lifestyle only increased by two percentage points in 2020 (18%) from 2019 (16%).

“Kitchen projects are the most popular among renovating homeowners, and while median spending has been flat on these projects for the past three years, investment on major remodels of large kitchens jumped 14% to $40,000 in 2020 compared with $35,000 in 2019.”

While cash remains the leading form of payment for home renovations (83%), the share of homeowners opting to finance their projects with credit cards fell significantly to 29% (from 37% in 2019). Tax refunds gained popularity among renovating homeowners in 2020 (10%), especially when funding small projects up to $5,000.

 

Gen-Xers Step Up Spending

While Baby Boomers (ages 55-74) have historically led in both renovation activity and spending, Gen-Xers (ages 40-54) narrowed the gap in 2020. Median spending for Baby Boomers, who represent 52% of renovating homeowners (down from 55% in 2019), remained flat at $15,000. Gen-Xers now account for 32% of renovating homeowners (up from 30% in 2019) and increased their median spending to $14,000 (from $12,000 in 2019). That said, the top 10% of both generations increased their investment in 2020, but Baby Boomers did so at a more significant rate (from $80,000 to $90,000 versus $82,000 to $85,000 among Gen-Xers). Median spending among Millennials (ages 25-39), who represent 12% of renovating homeowners, remained unchanged in 2020 ($10,000), with the top 10% investing $65,000.

 

Outdoor Projects Heat Up

While interior room remodels remain the most common projects (68%), outdoor areas have increased in popularity since 2018, with 2020 showing a jump of six percentage points (57%) among renovating homeowners. Improvements to outdoor spaces were directed toward the grounds, with beds or borders and lawns seeing significant growth in popularity (35% and 20%, respectively). Exterior upgrades, such as decks and porches or balconies, also increased in popularity in 2020 (14% and 12%, respectively), with homeowners investing 25% more in deck and porch upgrades ($2,500 and $1,500, respectively) compared with 2019.

 

Smaller Spaces See Higher Spending

Homeowners are investing in smaller areas that may once have been considered a luxury and are now a necessity. Demand for home-office projects jumped four percentage points (14%) and were 10% more expensive in 2020 ($1,100). Median spending on closet upgrades also saw a significant jump of 43% to $1,000.

 

Homes Get Smarter

Smart-home technology purchases continue to rise in popularity, with streaming-media players and TVs experiencing the greatest increases (14% and 12%, respectively) compared with 2019 (10% and 7%, respectively). A larger share of renovating homeowners purchased smart-technology products for their outdoor spaces than the previous year, including security cameras, light fixtures, and speakers or sound systems (19%, 7%, and 3%, respectively).

 

Homeowners Hire More Than One Professional

Nearly seven in eight homeowners hired professional help for their renovations in 2020 (87%), typically engaging more than one professional per project. Among professionals hired, specialty service providers were the most common (49%), followed by construction and design-related professionals (36% and 18%, respectively).

 

The Survey

The annual Houzz & Home survey is the largest survey of residential remodeling, building, and decorating activity published. The survey covers a wide range of renovation projects in 2020, from interior remodels and additions to home systems, exterior upgrades, and outdoor projects. Data gathered includes historical and planned spends, professional involvement, motivations and challenges behind building, renovation and decorating projects, as well as planned activities for 2021. The 2021 study includes more than 70,000 respondents in the U.S. alone. The survey was sent to registered users of Houzz and fielded in April and May 2021, and published earlier this summer.

Autos

New World Order

Rob Pion says factory ordering has long been the norm with trucks and some SUVs

Rob Pion says factory ordering has long been the norm with trucks and some SUVs, but the wait time for some vehicles is now six months to a year.

 

When asked how many new cars he had on his lot, Rob Pion, general manager of Bob Pion Buick GMC in Chicopee, quickly said “eight.”

And he did so with a subdued voice that conveyed the frustration that he and every other auto dealer in the 413 is feeling right now regarding a situation that is clearly out of their control, but also a reality that must be confronted.

And the depth of that reality become clear when Pion paused after adding up his new-car inventory in his head and acknowledged that his number is certainly higher than some of his fellow dealers in the area.

“I guess that’s not really too bad compared to some others,” he told BusinessWest, adding that this situation is not going to get appreciably better anytime soon, especially when it comes to the trucks and large SUVs that comprise his bread and butter. Consumers don’t have a lot to choose from, so unless they want to settle, and many of them don’t, they must order what they want and wait for it to come in.

Before, you didn’t see that many factory orders — it would be the oddball unit. Now, we’re almost in a build-to-delivery stage, particularly with some of the domestics, like Ford; they’re really encouraging people to just put in their order — they know they’re making a car that the customer wants.”

Or, as the case may be with many truck models, and to borrow that famous line from the start of Casablanca, ‘wait, and wait, and wait.’

Indeed, these have become the days of factory-ordered vehicles — a trend that is a world removed from what dealers in this area are generally used to.

Yes, there have always been times when a customer would have to order and then wait for a model with a number of specific features, packages, or even a rare color. And when it comes to pickups, especially the larger models used for towing, factory ordering has long been a common practice.

But in these days when factories — dealing with shortages of not only microchips but a host of other parts — are well behind in production at a time when demand is high, factory ordering has become, well, the order of the day for many makes, especially pickups and SUVs, but also luxury models, which customers are generally more willing to wait for.

Peter Wirth says that, while Mercedes-Benz of Springfield has always handled a good number of factory-ordered vehicles

Peter Wirth says that, while Mercedes-Benz of Springfield has always handled a good number of factory-ordered vehicles, those numbers have never been higher than they are now.

“We’ve never had so many cars factory-ordered,” said Peter Wirth, co-owner of Mercedes-Benz of Springfield. “We have perhaps 50 cars at the moment that are already sold and just waiting to come in. Next month, for example, we have cars coming for inventory, and we have another 25 cars that are pre-sold.”

These factory-ordered cars are certainly helping dealers cope with inventory levels that are unprecedented, said Wirth, adding that, currently, perhaps 75% of total new-car sales are happening in this fashion.

“How many cars we have in our inventory is not a good measuring stick for us,” he went on. “It’s more a question of ‘what percentage of people who want to buy a car from us can we take care of?’ And the answer is still relatively high, as long as the customer is willing to work with us. And two things are helping us — the first is that the luxury-car buyer is generally more patient, and two, it’s been all over the media, so they’re generally used to it; they’ve heard from another brand they may have looked at, or maybe they heard it while they were trying to buy a kitchen appliance or building materials.”

Ben Sullivan, chief operating officer at Balise Motor Sales, agreed. He noted that factory ordering is becoming more prevalent, and the manufacturers are seeing some advantages to this profound change in the way things are being done — in this country, at least.

“Before, you didn’t see that many factory orders — it would be the oddball unit,” he told BusinessWest. “Now, we’re almost in a build-to-delivery stage, particularly with some of the domestics, like Ford; they’re really encouraging people to just put in their order — they know they’re making a car that the customer wants.”

Could this new way become a more permanent model for the future given what appear to be real advantages for the manufacturer and even the dealer? Sullivan acknowledged that this is a legitimate question, and that factory ordering is far more prevalent in other parts of the world, where huge showrooms and hundreds of cars on a lot are simply not practical. But he and others wondered out loud if Americans would tolerate such a process in anything but an emergency situation.

“The United States market has never operated that way,” he noted. “Ford has gone public and said they would like to move that way, so we’ll see. It will be a component of where things go, but I don’t know if it will ever completely replace what we’re used to here. Americans, once they’ve made a decision that they want to buy something, whether it’s a car or a TV … it’s a matter of immediacy.

“When you tell people you necessarily can’t get X, Y, or Z — or, if you can, you don’t know when — some people will wait, but others will say ‘I don’t need a truck right now,’” he explained. “Before, people would order vehicles, then they became trained to buy one off the lot — that Amazon-like mentality where, if I can’t have it in one day, I don’t want it, or I’ll move along.”

“I’ve had customers that have had vehicles on order for nine or 10 months for one reason or another. They haven’t been built, and they may never be built because of shortages of certain things.”

Moving forward, Sullivan said, dealers will ultimately have to be ready, willing, and able to serve customers in both ways — those who want to factory order a car and those who want to come to a lot, pick out a car, and drive it home a few days or even a few hours later.

“The way that we look at it as retailers is that we have to be adaptable enough to handle the people that want a car absolutely today, and those who want to put in an order and get it exactly how they want it and wait 12 weeks. For us, we have to be able to do both.”

Wirth concurred, noting that the current trends represent a minor shift from the way things were for his brand. Indeed, he said maybe two-thirds of those looking to buy a car wouldn’t drive home with something already on the lot. Instead, they would want something close, and the dealership would try to find it through its “pipleline” — a sister store in New Jersey or other dealerships in the Northeast.

Now, with inventories low everywhere, finding the car in the desired color and with all the preferred options and packages is becoming far more difficult. So the preferred route is now factory-ordering one and waiting for it.

Generally, the wait is a few months, but for some trucks, it can be half a year or more, said Pion, demonstrating that, even with factory ordering, there are limitations and challenges — for the dealer and the consumer.

“I’ve had customers that have had vehicles on order for nine or 10 months for one reason or another,” he told BusinessWest. “They haven’t been built, and they may never be built because of shortages of certain things.

“The problem you run into when you get to trucks is they get so granular,” he went on. “It could be as simple as ‘I want this wheel,’ and they just don’t have that wheel available. A simple option here or there makes a vehicle unbuildable.”

In this climate, some consumers are settling for somewhat less than everything they want, while others are not. “Some say, ‘it doesn’t matter if it takes a year or a year and a half for the truck to come in; I want what I want,’” Pion explained, adding that, in such cases, a new model year may arrive before the order is filled, and a 2021 model becomes a 2022.

 

—George O’Brien

Cannabis

A Front-row Seat

Bruce Stebbins remembers the time during his tenure on the Massachusetts Gaming Commission when that body was essentially subleasing some of its space on Federal Street in Boston to the recently formed Cannabis Control Commission (CCC), charged with overseeing an industry then — and in most all ways still — in its infancy.

While the two entities had separate quarters, the commissions and their staffs would cross paths often, he said, adding that there were lively discussions and some sharing of ideas between the two very different worlds.

“I was regularly running into my counterparts on their commission and staff while waiting for the elevator,” he recalled. “We actually had a lot of staff from our team having a lot of conversations with staff from their team, in part out of convenience — they were on the same floor. There was a lot of information going back and forth on the staff level … and it was the introduction of that new industry that was really exciting for me.”

Little could he have known at that time, but Stebbins, a former Western Mass. resident known to many in this region for his work with a host of economic-development-related agencies, would soon be on the front lines of that new industry.

Bruce Stebbins

Bruce Stebbins

“We have 267 cannabis establishments open in Massachusetts, most of them on the retail side. Unlike gaming, which had a limited number of licenses, there are no limits on the number of cannabis licenses; it’s an interesting structure because there’s been an effort to create opportunities for a local entrepreneur as well as larger operators who have significant experience in other states.”

Indeed, he would eventually trade his seat on the gaming board for one on the Cannabis Control Commission. And that puts him in a unique position.

Indeed, he’s able to talk firsthand (as no one else can, because no one else has sat on both commissions) about these two huge additions to the state’s landscape — and its business community. And he did just that in a lengthy interview with BusinessWest, during which he did a little comparing and contrasting of the two industries. But mostly he talked about his latest assignment, how it came about, and what he projects for a cannabis industry that is already having a profound impact on the state — nearly $2 billion in sales since the first retail establishments opened in 2018 — and, especially, individual cities and towns.

He said the industries are similar in that they are bringing millions of dollars in tax revenue to the state and adding thousands of jobs as well, but also different in some ways. There are only three casinos, obviously, while there are now nearly 300 cannabis-related operations doing business in the state. The casinos are owned and operated by huge international corporations, while the cannabis ventures come in all sizes, from huge, multi-state operations to smaller entrepreneurial enterprises.

And while the resort casinos have changed the landscape in Springfield, Everett, and Plainfield, the cannabis industry is reshaping dozens of smaller communities and bringing new life to idle real estate across the state (more on that later).

Named to the board in January, Stebbins said he’s still learning about the burgeoning cannabis industry in Massachusetts, and there is much to learn.

His education involves venturing out and seeing various operations in person, he said, and also listening to a large and intriguing mix of activists, stakeholders, physicians, parents, and those who have been in the industry, including some who have come to Massachusetts from other states that had legalized cannabis earlier, such as Colorado and Washington.

Overall, while it’s difficult to say how large and impactful the cannabis industry can become in the Bay State, he said there are essentially “no limits” on either the number of licenses or the bearing of this sector on the economy or individual cities and towns.

“We have 267 cannabis establishments open in Massachusetts, most of them on the retail side,” he noted. “Unlike gaming, which had a limited number of licenses, there are no limits on the number of cannabis licenses; it’s an interesting structure because there’s been an effort to create opportunities for a local entrepreneur as well as larger operators who have significant experience in other states.”

For this issue and its focus on the cannabis industry, BusinessWest talked with Stebbins about what he can see from his front-row seat, what he’s learning, and what he projects for an industry that is off to a fast start and shows no signs of slowing down.

 

On a Roll

When asked about how he wound up trading his seat on one commission for the other, Stebbins started by talking about the positions that became available on the CCC and his decision to apply for one of them.

Key to that decision is the why. As with the Gaming Commission, he was drawn to this board — and the cannabis industry — because of its broad implications for economic development within the Commonwealth.

“Part of my passion has been fueled by the opportunity to work with this new industry coming into Massachusetts,” he noted. “Similar to my interest in the gaming work that I did, I was looking for the economic-development aspects of this [cannabis] industry, whether it’s investment, jobs, small-business opportunity … I certainly saw that both gaming and the introduction of the cannabis industry was going to offer those opportunities. That’s where my passion lay with gaming, and it’s where it lies with cannabis as well.”

Surveying the scene in the Commonwealth, he said cannabis has come a long way in a short time in Massachusetts.

“I was impressed with the work of the commission and the staff … from the time the ballot question passed to the statute to opening the first retail, it was about two years; that’s very aggressive,” he said, adding that the industry is still ascending, with no real indication of just how high it can go.

“Right now, a big part of the agenda of our meetings is looking at renewals, final licenses for applicants, and also a healthy number of provisional-license applications that are coming through the door,” he said. “There doesn’t seem to be a slowing down of activity when it comes to people pursuing a license and people taking the final steps to opening their doors.”

Elaborating, he said there are a number of ways to measure the impact of this industry, with the number of licenses and the volume of sales being only a few of them.

Others include the positive impact on the real-estate market, with cannabis operations bringing a number of idle or underutilized properties — from retail storefronts to former paper and textile mills — back to productive life, with the promise of more at venues that include the massive former JCPenney property at the Eastfield Mall.

“Being from Western Mass., being from Springfield, and knowing Holyoke, I think one of the obvious returns has been investment in brick and mortar, whether it’s been an old mill building as a cultivation-and-grow facility to some of the new retail facilities that you see popping up,” Stebbins said. “There have been many healthy examples of how this has led to increased investment in communities that might have been struggling with underutilized properties that weren’t helping out the tax rolls.”

He cited examples of such dynamic reuse in Holyoke, Sturbridge, Southbridge, and several other communities, while noting that behind each of those walls are jobs that didn’t exist three years ago.

One of the industry’s best qualities, he went on, is the opportunities it offers to different constituencies, when it comes to both jobs and entrepreneurship — within the industry and supporting it as well.

“The cannabis statute obviously wanted to a heavy emphasis on hiring those who were disproportionately impacted by the war on drugs,” he explained. “We are in the middle of our application phase for our social-equity program, which gives individuals from those neighborhoods an opportunity to explore being an entrepreneur in this industry, looking at a management track, looking at an entry-level job track, as well as ancillary business; maybe you don’t want to actually be a cannabis retailer, but you might be an electrician, and what job opportunities and business opportunities are out there because of this industry?”

Stebbins acknowledged there are certainly some barriers to entering this industry, especially when it comes to capital and access to it, and he lauded the CCC and the Legislature for efforts to create loan funds — some of them from revenues generated by the industry — and other programs to ease access and remove some of those barriers.

“Some great work has been done, and we’re not taking our eye off the focus of making sure those opportunities are available for social-equity applicants,” he said.

These qualities separate the cannabis industry from gaming in some respects, he went on, adding that, while both have created jobs, the cannabis sector has created more opportunities in more regions and in more cities and towns — and also more types of opportunities.

“Cannabis has created a wide variety of jobs — testing jobs, cultivation jobs, retail jobs, product-manufacturing jobs,” he said. “And there’s also the fact that the industry has the ability to take root across the Commonwealth and not just in specific regions or specific, identified communities.”

 

Joint Ventures

Reflecting on the past several years, Stebbins said he’s had a remarkable opportunity — one that has placed him on the front lines in the development and maturation of not just one new industry within the Commonwealth, but two of them.

It’s been a rewarding experience — and a learning experience — on many levels, he said, adding quickly that he has a great deal of energy and passion when it comes to finding solutions and helping new businesses grow, reach their full potential, and be successful.

That’s true of both sectors, but especially his latest assignment — a cannabis sector that has certainly taken root, both literally and figuratively, but will inevitably suffer growing pains. u

 

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

Accounting and Tax Planning Special Coverage

Doing the Math

 

Joe Bova compared the past 18 months in the accounting profession

Joe Bova compared the past 18 months in the accounting profession to “trying to sail a ship while you’re building that ship.”

For accountants, the past 18 months have been a time of change, challenge, and adapting to everything from new ways of doing business to new responsibilities with clients to ever-changing tax laws. Looking forward, they note that many of these changes are permanent in nature.

It’s been called the ‘never-ending tax season.’

That’s just one of the many colorful ways those in the accounting sector have chosen to describe the past 18 months or so, a time of change, challenge, learning, and adapting — for them and for their clients.

Indeed, this time of COVID-19 has been marked by everything from changing tax laws to fluid filing deadlines; from new responsibilities, such as helping clients handle PPP and SBA loan paperwork, to changes when it comes to where and how work gets done; from a greater reliance on technology to the acceleration of a shift in accounting toward a more advisory role as opposed to merely adding up numbers.

Summing it all up, Joseph Bova, CPA, CVA, CGMA, a partner with Northampton-based Bova Harrington & Associates, said navigating all this has been “like trying to sail a ship while you’re building the ship.”

Nick Lapier, CPA, a partner with West Springfield-based LaPier Dillon, used phraseology from sports (sort of), but more from politics.

“It’s very hard for us to focus on our work when the government kept moving the goalposts.”

“It’s very hard for us to focus on our work when the government kept moving the goalposts,” he said, referring to the many changes in tax laws — some coming in the middle of tax season — and moving of filing deadlines. “For some people who filed their tax returns early, we then found ourselves amending those returns because they changed some of the rules. And some we didn’t file because we hoped they would change the rules.

“The end zone kept moving,” he went on. “We’d be on the 10-yard line, work really hard, and still be on the 10-yard line. There are 50 sovereign states that have the right to tax, so if you have clients filing tax returns in multiple states, each state was also possibly changing their laws and moving the goalposts.”

As the calendar turns to August, those we spoke with said this has been a time for many at area firms to catch their breath and take some of the vacation days they didn’t take last year or earlier this year. It’s also a time to reflect on what has transpired and what likely lies ahead in terms of the lessons learned and which of the changes seen over the past year and half are more permanent than temporary in nature.

Nick Lapier

Nick Lapier says a taxing period for all accountants was exacerbated by the federal and state governments constantly “moving the goalposts.”

Julie Quink, CPA, CFE, managing partner of West Springfield-based Burkhart Pizzanelli, P.C., said her firm, like most others, is not simply turning back the clock to late 2019 when it comes to returning to something approaching normal, especially when it comes to how and where business is conducted. She said most employees have returned to the office, but moving forward, there will be even more flexibility when it comes to schedules and working remotely because of what’s been learned over the past 18 months.

“We’re not going to dial back to everyone needing to be here those static hours of 8:30 to 5,” she noted. “I’m a glass-half-full person, and if there is a positive from the past 16 or 17 months that we’ve been dealing with, it’s taught us that we need to be more flexible, more mobile, and more adaptable — and understand that people don’t have to be actually sitting in their offices to get their job done.”

Meanwhile, Lapier told BusinessWest that many accountants, himself included, spent far less time meeting face-to-face with clients in 2020 and early 2021, and he expects that trend to continue.

“This current generation lives in the digital world; they don’t need to see people — they transact their personal and their business life electronically,” he explained. “What has changed because of COVID is that all the prior generations have adopted that same mentality — not 100%, but a heck of a lot more than before the pandemic.”

Howard Cheney, CPA, MST, a partner at Holyoke-based Meyers Brothers Kalicka, P.C. and director of the firm’s Audit and Accounting Services, agreed, while noting, as others did, that the pandemic in many ways accelerated a trend within the industry toward accountants shifting to roles that are more advisory in nature, with a greater focus on the future than the numbers from the past quarter or two.

“I’m a glass-half-full person, and if there is a positive from the past 16 or 17 months that we’ve been dealing with, it’s taught us that we need to be more flexible, more mobile, and more adaptable — and understand that people don’t have to be actually sitting in their offices to get their job done.”

“Accounting has for many years been an historical-look-back kind of thing,” said Cheney, part of an executive committee now managing the firm. “With the speed that people can now get data, they don’t need us to tell them about what happened six months ago; they need us to tell them what’s going to happen six months from now and help them interpret that.”

For this issue and its focus on accounting and tax planning, BusinessWest talked with several CPAs about the never-ending tax season, which still hasn’t ended — many are still dealing with a large number of extensions, many of them resulting from changing tax laws — and what will come next in a sector that has been taxed (yes, that’s an industry term) by this pandemic, and in all kinds of ways.

 

A Taxing Time

Chris Nadeau, CMA, CPA, CVA said he spent most of the past April — the height of tax season — in Florida. And hardly any of his clients knew he was working and handling their needs from more than 1,000 miles away.

Julie Quink

Among the many lessons learned from COVID, Julie Quink says, is the need for more flexibility in when and where people work.

“No one would have known unless I told them,” said Nadeau, a director with Hartford-based Whittlesey, which has offices locally in Holyoke, adding that he would never have considered such a working arrangement prior to the pandemic, but COVID provided ample proof that a CPA doesn’t have to share an area with a client to get the work done.

This anecdote speaks volumes about just how profoundly the landscape has changed in the accounting and tax-planning world over the past year and a half. There have been a number of seismic shifts, and where people work is just one of them, said Nadeau, who has come to his office on Bobala Road in Holyoke only a few times since St. Patrick’s Day of 2020 and was in on this day only to meet with BusinessWest.

Others we spoke with told of similar learning experiences during what has been a year and a half of acting and reacting to everything that has been thrown at them since those days in mid-March of last year when everyone — well, almost everyone — packed up and went home for what they thought would be a few weeks.

As everyone knows, that certainly wasn’t the case, and thus accountants, like all those in business, had to adjust to a new playing field, finding new and sometimes better ways to do things and communicate with clients and fellow team members alike.

“We had to reinvent our processes — how we communicated with the team and how we shared information back and forth, especially when working remotely,” said Lapier of those early days, noting that a three-month extension of the traditional April 15 filing deadline helped spread the work out and was a saving grace.

Bova agreed, noting that his firm of nine employees adjusted to the new landscape out of necessity, with investments in technology, a move to a paperless work process, Zoom meetings between employees and with clients, visits by appointment only, and other steps.

Moving forward, many of these new ways of doing things will continue, with perhaps the biggest being where people work. Indeed, most of the firms we spoke with said some variation of hybrid schedules will become the norm for at least some employees .

“In the future, there will be more hybrid work models, where people work in the office, but they do some work at home — I can see some real potential for that,” said Bova, adding that not all workers have returned to the office, and he’s not sure when they will. “We’re going to explore our options with this; there’s no need to deal with it in the summer — it will be more of a fall issue.”

Howard Cheney says the pandemic

Howard Cheney says the pandemic may have accelerated, or amplified, a shift within accounting to an advisory role, with more emphasis on the future than the past.

Cheney agreed. “We’ve been really flexible as a business with not requiring people to come back just yet,” he said, adding that most at the company have returned to their offices in the PeoplesBank building, but some are still working remotely. “The likelihood is that some kind of hybrid work schedule will be the future for our business.”

Whittlesey recently adopted a hybrid work policy, one that enables people to work “from wherever they will be most efficient,” said Nadeau, adding that most are finding it more efficient to work remotely, and they will continue to do so in the future.

“Some people are not coming in at all, and some are coming in a day or two a week,” he explained. “It’s ‘work where you need to for that day.’ Some employees have actually moved away to another state during COVID, so you could definitely call them ‘remote.’ And it’s been pretty seamless — and flawless.”

And this shift brings a number of benefits for the company, including a possible reduction of its physical footprint, he said, adding that it is likely that the firm will be able to downsize in Holyoke. “At some point down the road, we’ll see what kind of space we’ll need.”

It also means more and better opportunities to recruit top talent to the company because such employees will be able to work from anywhere, including another state, as Nadeau did earlier this year.

“It’s incredibly challenging to recruit people — I think there are fewer accounting students graduating now, and a lot of the people who do graduate end up going to Boston or New York to work for the Big Four firms,” he explained. “So having a remote-work or hybrid-work policy is an added benefit that we can offer, and one that firms are probably going to have to offer if they want to attract top talent.”

As for interaction and communication with clients, while all those we spoke with said face-to-face is still the preferred option, COVID has shown that Zoom and even the telephone work well — and, as with working arrangements, when it comes to interacting with clients, flexibility is the new watchword.

“As we’re talking with our clients, we’re seeing a combination of the two, in-person meetings and those by Zoom and phone — some want meetings in person, and other times, a Zoom meeting or phone call is sufficient,” said Nadeau, noting, as others did, a significant time savings from not physically traveling to see clients, so those at the firm are able to do more with the hours in the day.

Cheney agreed, to some extent, but noted there will always be plenty of room for, and need for, in-person service to clients.

“You don’t want to lose sight of that personal-touch aspect,” he told BusinessWest. “You don’t want to do everything remotely — I don’t think clients want to do everything remotely. But they’re OK with some level [of remote interaction] because we’ve gotten used to it, and they see the efficiency, too.”

 

Crunching the Numbers

As he tried to put all the changes to tax laws — and changes to the changes — into perspective, Joe Bova recalled the communication he received from the U.S. Small Business Administration concerning PPP loans that came with the header “Interim Final Rules.”

This oxymoron was just one of many challenging measures and changes that CPAs had to make sense of over the past 18 months, a time that Bova described as “a shooting gallery.”

“What’s been different during these past two seasons is that tax-law changes have been happening during tax season,” he told BusinessWest. “And when the PPP loans first came out … the SBA and the Treasury were updating their websites almost daily, and there was a lot of ambiguity in the definitions. We [accountants] were kind of on the front lines because people were calling us, even the banks.

“We all had the same information, which wasn’t clear, so people were calling us to help them interpret these changes,” he went on. “You were in the water on the boat, but you were still building the boat.”

In addition to coping with new legislation and changing rules, there was simply more work to do, said those we spoke with.

“Our workload has gone up probably a good 20% without adding a single client,” said Lapier, listing PPP applications, forgiveness, and audit work, as well as helping companies with SBA loans and the unemployment-tax credit as just some of the additional assignments.

Indeed, on top of all that, there was simply more consulting work to do as companies, especially smaller ones, leaned on their accountants as perhaps never before to help them make what were often very difficult decisions during truly unprecedented times.

Now, with the pandemic easing in some respects, the nature of some of this advisory work is changing, said Quink, noting that many business owners are now able to focus more on the future instead of being consumed by the present.

“We’re seeing a lot of clients that are buying and selling businesses, which is a good sign,” she noted. “And overall, people are starting to think forward now; they were in survival mode for a period of time, and now they’re starting to think forward from a business perspective.”

And there is a lot to think about, she went on, noting that what she and others at her firm are advising clients on is how to adapt to change and navigate challenge — such as a global pandemic.

“We’re talking to our clients that we see as potentially at risk because they don’t have the ability to adapt or they’re not identifying how to adapt,” she explained. “We know that things can change in the blink of an eye; we’ve seen a client, a third-generation business, close because it wasn’t able to look forward and move in a way that still made them competitive. You can’t rest on what you have — you have to be always looking forward, and that’s a hard thing for some of our more mature clients and businesses who have done things they’ve always done, and it’s worked.”

This additional advisory work, as Cheney noted earlier, is merely an acceleration of a trend that has been ongoing for many years now when it comes to clients and what they want and need from their accounting firm, with the accent on the future and how to be prepared for it.

Quink agreed that this shift, if that’s the proper term, has been ongoing for some time now as technology has enabled clients of all kinds to access data more quickly and more easily than ever before.

“We see robots in all aspects of life, and our profession is going to go that way as well,” she explained. “We’re using technology to do the things we’ve always done by hand; we’re now going to have programs that run that data for us. What we’re seeing and what we’re preparing people in our profession for is a shift to more of an advisory-slash-consulting role.”

 

Bottom Line

For several years now, Quink told BusinessWest, Burkhart Pizzanelli has closed its doors on Fridays. Historically, those Fridays between Memorial Day and Labor Day have served as comp time for those who logged considerable overtime during tax time, and it’s been a time to recharge the batteries.

This year, staff members have needed those Fridays off more than ever, she said, adding that, for many reasons — from all the additional work detailed above to the vacations that haven’t been taken over the past 18 months — there have been many signs of fatigue.

It’s certainly understandable. Indeed, while every business sector has been impacted by COVID, those in accounting were affected in different ways, with more work to do, different work to take on, and learning curves when it came to new and different ways of doing business.

They don’t call it the ‘never-ending tax season’ for nothing. It’s far from over, but in many ways, things are … well, less taxing.

 

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

Modern Office Special Coverage

Getting Up Off the Floor

For those in the office furniture and design sector, the past 18 months have been a long and extremely challenging stretch. Looking ahead, while the pandemic has eased to some extent, new challenges and question marks loom. The questions concern everything from how many people will return to the office to whether they will have their own space if and when they return. And the challenges involve everything from long wait times for ordered products to the specter of skyrocketing prices and the impact they will have on business.

Mark Proshan says a combination of factors

Mark Proshan says a combination of factors makes it difficult to project what will come next for this industry.

Mark Proshan says the e-mail found its way into his inbox earlier that morning. It was short and to the point, but it clearly articulated one of the many challenges still facing those in the office furniture and design business.

“‘I’m in the process of closing my office and moving employees to fully remote work,’” wrote the business owner and client that Proshan, president of the West Springfield-based Lexington Group, opted not to name. “‘I have a lot of office furniture I’m looking to sell.”

As he commented on what he was reading, Proshan started with that last bit of news. He said there are a number of business owners and managers looking to unload unneeded office furniture these days. They should know first that there is already a glut, and, second, that the price they have in the back of their mind is not likely to be the price they’re going to get for what they’re looking to sell. “With the massive amounts of furniture now on the market, selling furniture isn’t something that’s going to realize an amazing return on the investment.”

But that’s just a small part of the story now unfolding, said Proshan, noting that, while this particular business owner knows just what he’s doing with his office, many do not.

Indeed, a full 18 months after the term ‘COVID’ entered the lexicon, there is a great deal of uncertainty regarding what will happen at many offices, colleges, hospitals, and other kinds of businesses moving forward. Proshan has his theories, and we’ll get to some of them later, but he and others believe there will certainly be some downsizing, some hybrid work schedules for many employees, and more of the outright closures and conversion to remote working described in that e-mail.

But at the same time, some businesses and institutions that are waking up (for lack of a better phrase) from COVID are ready to advance plans for new furniture and accommodations.

And they are running into strong headwinds in the form of supply shortages, long wait times for desired items, and, almost certainly, higher prices in a nod to the laws of supply and demand — and the skyrocketing cost of shipping items from abroad.

“We can’t get the products out of where we need to get them from,” said Fran Arnold, owner of Holyoke-based Conklin Office Furniture, which, in addition to selling new and used furniture, manufactures its own lines of products overseas and remanufactures used furniture here. “Every manufacturer in the country is seeing huge delays when it comes to delivering furniture.

At Conklin Office, co-owned by Fran and Rosemary Arnold

At Conklin Office, co-owned by Fran and Rosemary Arnold, new challenges include supply-chain issues, soaring shipping costs, and long wait times for ordered products.

“On the import side, we’re running with massive delays in shipping and huge increases in the cost of shipping,” he went on, with some noticeable exasperation in his voice. “Our shipping costs have gone from $3,500 to $5,000 per container all the way to $23,500 per container. That’s a massive increase for freight; it’s now costing us more money to get the stuff here than to manufacture it over there.”

Proshan agreed.

“Because most of the manufacturers have employee shortages and raw-goods shortages, everyone’s lead times have been drastically pushed out,” he noted. “You try to stock up on what you think might make the most sense for when the floodgates open, but you just don’t know, and it’s going to be a difficult situation when people want products from you and manufacturers aren’t able to deliver them to you until much later than your customer is hoping to receive them.”

Overall, while the worst of the storm might be past for those in this sector — that’s might — there is still considerable cloudiness and general uncertainty about the forecast, and challenges ranging from those inventory issues to simply finding people to drive delivery trucks, to a huge merger in the industry between manufacturers Herman Miller and Knoll, which only leads to more question marks.

Indeed, what happens next is anyone’s guess, as BusinessWest learned as it talked with Proshan and Arnold about has transpired and what is likely on the horizon.

 

Measures on the Table

As he walked and talked with BusinessWest in his huge showroom, Proshan noted that he’s selling a number of items to be used by people working at home, especially chairs — “they want good seating, but they don’t want to spend a lot for it” — and sit/stand desks, because they’re smaller and also because many people want the option of sitting or standing.

Meanwhile, he said he’s also been selling more large conference-room tables — those for 12 to 20 people — than would be considered normal.

When asked why, he gave a quick and definitive “I don’t know, exactly, but we are,” before joking that companies might need bigger tables for all those meetings that will decide what they’re going to do next.

Overall, this interest in large conference-room tables and the possible reasons behind it comprise just one of the many unknowns for this industry. What is known is that the past 18 months have been an extremely difficult time, and the challenges are far from over.

They may just be different challenges.

“Every manufacturer in the country is seeing huge delays when it comes to delivering furniture.”

Looking back, Arnold said Conklin, like all businesses in this sector, saw business evaporate early on during the pandemic as businesses shut down and then hunkered down, with buying new or used office furniture, or redesigning their space, the last thing on their minds.

“We were flying just before COVID, and then we just hit a wall,” he explained, adding that, through a number of efficiency and austerity measures — including a four-day work week for all employees — the company managed to slash expenses to an extent that it was nearly as profitable in 2020 as it was in 2019.

Elaborating, he said that, in hindsight, the timing could not have been better for the company to consolidate operations and move into new facilities on Appleton Street in Holyoke in late 2019.

“We’re able to do more with fewer people,” he explained. “We’re much better organized, and we’re not so spread out. We’re much more efficient.”

Now, as it emerges from those very difficult times, there are new and different challenges to face, including supply-chain issues and a lack of inventory, just as some larger corporations are in a “panic mode,” a phrase he used a few times, to move on from the pandemic themselves.

“These corporations are working our sales teams to the limit,” he explained. “They want numbers, they want to know when things can be delivered … and a lot of the news we have to give them is not good; prices are going up, and deliveries are being postponed.”

Overall, Arnold said, inflation and the skyrocketing cost of shipping product are just starting to impact prices within the industry.

“We’ve just had our first price increase on our imported products; we just couldn’t hold it where it was any longer,” he explained, adding that, as the cost of shipping continues to escalate, more price hikes are likely. “It’s been quite an experience, and I don’t know how it will all play out; it’s a perfect storm that’s developing, and where it will go, I don’t know.”

 

Looking ahead and projecting what might come next, Proshan said this assignment is difficult because many companies are still very much trying to decide what they’re going to do.

“At the moment, business leaders are trying to figure out what their employees want, and employees are trying to figure out what their employers are going to be expecting,” he explained. “With all of that taking place, not a whole lot has happened yet. People have been talking about business getting back up to speed in the spring, and then the fall, which is not here yet, and then, the first of the year. We still have those mileage markers out there in front of us, so there’s a whole lot more that’s unknown than known.”

Proshan theorizes that many companies will create more space for each employee in efforts to create safer environments, and that, in all likelihood, there will be fewer people working in the office and more in remote settings.

“Every time you have a space that was occupied by three people, that had three work environments, they might cut that back to two to create a bigger gap between people,” he explained. “So now you have a work environment that’s going to be for sale or is going to become surplus; that’s one of the things we’re seeing.

“It’s going to be a difficult situation when people want products from you and manufacturers aren’t able to deliver them to you until much later than your customer is hoping to receive them.”

“And I think that when it gets sorted out as to who’s going back and who’s not, and how often they’re going back,” he went on, “I think a lot of personal space is going to disappear. If you work at home, you’re going to have your own workspace; when you go to the office, you may or may not have your own workspace. It may be a space that’s occupied by someone else on the days you’re not there.”

 

Bottom Line

Proshan, who does a good bit of sailing when he’s not working, made a number of comparisons between what’s happening in his industry and what transpires on the water.

Specifically, he talked about wind.

“You can’t see wind,” he told BusinessWest. “What people experience as wind is what they see as the result of wind and its impact on objects. When you see wind blowing through the trees, you don’t see the wind, you see the result of the wind. When you’re on a boat and there’s no wind, if you look at the water and see it start to ripple, you know that wind is approaching you, and it can either knock you over or make you go faster, or help you determine which direction to go in.

“It’s almost as if we’re sailing,” he said of the current conditions in his business, “and not able to see the wind in the trees.”

That was Proshan’s way of saying that an industry that has been blown about for the past 18 months, and not in a good way, is still very much in the dark about what will happen next.

The mission, he said, is to be as prepared as possible, even with all those unknowns.

“If you don’t pay attention to the possibilities,” he said in conclusion, “you’re going to be too late.”

 

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

Law Special Coverage

Firm Commitment

Peter Shrair

Peter Shrair says the two firms saw “some real synergies” when they started talking.

Springfield-based Cooley Shrair and Hartford-based Halloran Sage have a lot in common, including histories that span more than 75 years and a focus on the broad needs of business clients. But their philosophies and cultures also have a lot in common, as their leaders discovered during discussions that led to Cooley Shrair joining the Halloran Sage family last month. The result, they hope, will be more inclusive service to clients, as well as a more attractive landing spot for the young talent all law firms need to grow.

When asked what Halloran Sage and Cooley Shrair bring to each other’s table, David Shrair had to think back only 15 minutes.

“We’ve got a new, West Hartford-based client who called me and said, ‘I tried to trademark a logo myself, and I got lost. Can you help us?’” said Shrair, a partner at his namesake Springfield firm, which recently joined the much larger, Hartford-based Halloran Sage law group.

“We normally would have referred him to a firm we did business with in Hartford, who did all our intellectual-property work,” Shrair continued. “But I got on the computer and sent out a blast e-mail to partners and counsel at Halloran Sage. Within three minutes, I got one name from five different partners. I’ve connected that partner, he’s got the logo, and we’re working on it.”

In other words, by joining forces with 86-year-old Halloran Sage, an 80-attorney practice whose law expertise in the realm known as transactional business runs deeper in some areas than Cooley Shrair’s, the firm can keep its clients in house for a much wider range of matters, instead of farming them out, he noted.

“We can keep an eye on the case and make sure it’s being handled properly, which is very difficult to do when you’re sending it out to somebody else, and you have no idea whether your client is being taken care of,” said Peter Shrair, another partner with the firm. “If we’re looking at the client’s interest first, then the client gets a much better product.”

That’s one of the ideas behind what both firms aren’t calling a merger or an acquisition, but a joining together of the two entities under the Halloran Sage umbrella.

“We started talking, and we saw some synergies between what we do and what they do. And I had a thought that one plus one could equal three, with a really good group of smart people working together.”

Peter said he started talking informally to Bill McGrath, a partner at Halloran Sage, about such a relationship last year.

“Another lawyer in their office, Sue Scibilia, and I were talking about something else. She said to me, ‘you really should meet Bill McGrath. He’s a good business person and one of the smartest lawyers I’ve ever known.’ And I consider Sue to be one of the smartest lawyers I’ve ever known. So, we started talking, and we saw some synergies between what we do and what they do. And I had a thought that one plus one could equal three, with a really good group of smart people working together.”

Casey O’Connell, another partner at Halloran Sage, agreed.

“This has always been a Connecticut-based firm with a regional focus,” he told BusinessWest. “We’re always looking to find ways to better serve our clients and to provide the best possible legal services that we as a legal firm can provide. So we’re always on the lookout to have talented attorneys with complementary practices and similar philosophies to join our firm.”

David Shrair says the combined firm will be able to keep more clients completely in-house.

David Shrair says the combined firm will be able to keep more clients completely in-house.

After informal discussions turned more specific over several months, he went on, “there were some meetings among people with the firms, and it was determined it would really be a great fit and a way for us to collectively be bigger than we both were separately and, most importantly, to provide additional resources to our client base and Cooley Shrair’s client base to better serve our clients.”

For this issue’s focus on law, BusinessWest sat down with O’Connell and the two Shrairs to talk about why this relationship makes sense, and why both firms feel they — and their business clients — are better off because of it.

 

One-stop Shop

Business clients, after all, are at the heart of both firms’ work. Besides a shared focus on transactional law, which incorporates activities like contracts, finance, construction and real estate, risk management, restructuring and bankruptcies, board governance, intellectual property, and a host of others, Halloran Sage also boasts broad expertise in business litigation.

“That’s a service that we had not been offering for a number of years,” Peter Shrair said. “Even when we offered it, it clearly wasn’t with that depth of people. We had one or two, maybe at one point three people doing litigation, but they might have 30. And depending on the size and complexity of the matter, they have the skill, knowledge base, and depth of people to handle it.”

The firms are similar in other ways — for instance, both have a large banking practice, representing different banks, “so there’s a synergy right there,” David added.

“We collaborate very well across practices,” O’Connell said, “and that is one way where the firms can mutually help each other, with the Cooley Shrair folks bringing a wealth of transactional and business banking knowledge that really strengthens our practice areas. But we also have a very robust litigation practice.

“I would say Halloran is a full-service firm, and our litigation portion of the firm is very large and robust — we’re one of the biggest firms that focuses on litigation in Connecticut,” he went on. “And one of the reasons we have such a long history in Connecticut is our ability to provide clients with essentially one-stop shopping.”

Joining a Connecticut-based firm — Halloran Sage has five offices in the Nutmeg State — also makes sense in that three of Cooley Shrair’s attorneys were already admitted to the Connecticut bar, and the firm has worked with many clients from across the border.

This isn’t the first time Halloran Sage has taken on an established group of attorneys all at once, but most of its growth over the years has been organic, O’Connell said. For instance, it launched a New Haven office with two attorneys in 2012, and has since grown that site to 12 attorneys.

“It was a big success story to build and maintain a presence in that part of the state,” he noted. “We have an office Washington, D.C., but [Springfield] is our first office outside Connecticut with a large presence. This really broadens our reach to become not just a Connecticut firm, but a Southern New England firm.”

Client relationships won’t be disrupted, Peter Shrair said, but may shift over time.

Casey O’Connell

Casey O’Connell

“We collaborate very well across practices, and that is one way where the firms can mutually help each other, with the Cooley Shrair folks bringing a wealth of transactional and business banking knowledge that really strengthens our practice areas.”

“If it’s a more natural fit for someone from Hartford to handle something, they’ll handle it,” he explained, noting, as an example, a litigation case that came in just that morning and was referred to attorneys in Hartford. “We’re looking for whatever is best for the client — if a client can be handled better out of New Haven, we want to handle that out of New Haven. If it can be handled better in Springfield, presumably we’ll handle it in Springfield. “Really, it deals with whose practice area it fits best in.”

 

Business as Usual, Sort Of

For two firms that deal heavily with business clients — at a time when the business world has been rocked by COVID-19 — the past 18 months have gone surprisingly well, Peter noted.

“At least as far as my practice goes, there was very little change,” he said. “In fact, with the advent of Zoom and Microsoft Teams and everything else, it was probably easier because you could get different people online together quickly and have a discussion.”

David Shrair was stranded in Florida in March 2020 when the economy first began to shut down — so his firm shipped him a computer and double-screen monitor.

“I closed one of my largest transactions in years from Florida; I did Planning Board meetings from Florida, just like I was sitting in Springfield or wherever; it mattered not,” he recalled. “It’s interesting — with the shutdown and all the issues that went with it, most of our business clients continued very much along the same vein. They had their own internal problems, but the sales and acquisitions and all that still continued to go on. We have been extremely busy.”

After an initial slowing of work in the pipeline last spring, Halloran Sage’s team adjusted quickly to the pandemic as well, O’Connell said, and business has been strong from the second half of 2020 to the present. The transactional work has been more robust than litigation because court activity slowed to a crawl last year, but overall, business has been brisk, and the firm is on a growth trajectory.

“We’re always looking for new opportunities and ways to serve our clients. That includes having new attorneys come in with different specialties or outlooks or just to grow our bench and have more resources to grow our client base,” he went on. “We’re always looking to figure out how we can modify our firm or business to better serve our clients. That’s what the current combination of Cooley Shrair and Halloran Sage is all about, and certainly where Halloran wants to continue to go, to make sure we’re staying ahead of the curve and in the best position to serve our clients.”

The broader geographic reach will also benefit the combined firm in attracting talent, as attorneys will be able to access opportunities across Connecticut as well as into Massachusetts, and move around as their life circumstances change, Peter Shrair said. And David noted that being part of a much larger organization broadens the partnership track, which can also be a draw for young attorneys to settle in this region.

But in the end, O’Connell said, what the discussions really came down to was a perceived alignment in the firms’ client-first philosophies.

“We went through some internal discussions, not really to create a new philosophy, but to figure out a way to better articulate our firm’s philosophy, and we have determined that our firm’s philosophy is ‘client, firm, self,’ in that order,” he said. “In talking to the Cooley Shrair folks, we found there was a great alignment with how they deliver service, and our philosophies really align, so seemed like a natural fit when we pursued it.”

Peter Shrair agreed. “For 75-plus years, that has always been our mantra — our response time and our response to clients’ needs.”

 

Joseph Bednar can be reached at [email protected]

 

 

Special Coverage Technology

Strong Signals

By Mark Morris

When the pandemic arrived early last year and many companies adjusted to remote work for their staff, it was IT professionals who got everyone up and running from their homes.

Now, as the world begins to move away from the pandemic and companies begin bringing employees back to the office, the demand to hire IT pros is even higher than it was before COVID-19 emerged. And that poses challenges for employers.

In a normal year, said Delcie Bean, CEO of Paragus Strategic IT, the company sees about 10% turnover of people leaving and new staff being hired. During the pandemic, there was no turnover, as every one of the 50 Paragus employees stayed in their job.

In the last four months, however, as the economy has improved and COVID restrictions have eased, Bean has seen a “tremendous transition” among the IT labor force.

“Many of those who are leaving are pursuing remote-work opportunities that didn’t exist before the pandemic,” he said. “Most of these companies are not local and would never have interviewed or offered jobs to these workers in the past.”

Bean cited a number of reasons for the high demand for IT talent. During the pandemic, nearly every company increased their use and dependence on technology, which requires more people to keep systems up and running. As the economy improves, companies are pursuing more projects and thus increasing their need for IT talent. The pandemic also made it acceptable to hire people who work only remotely, creating even more opportunities for IT pros.

“With the increased dependence on technology, an improved economy, and the ability to work remotely, we’re seeing employers do things they would not have done before,” he said.

Joel Mollison, president of Northeast IT Systems, noted that, unlike others in IT support, his 18-person company does not have high worker turnover. He credits that to attracting IT staff who enjoy working with Northeast’s varied client list, which covers sectors from insurance and healthcare to manufacturing, municipalities, and even cannabis.

“Many of those who are leaving are pursuing remote-work opportunities that didn’t exist before the pandemic. Most of these companies are not local and would never have interviewed or offered jobs to these workers in the past.”

One notable challenge to retaining his workforce involves companies such as banks, manufacturers, and other industries that are looking to bring their IT support in-house, he said. “As a service provider in Western Mass., we’re competing against much larger institutions in the region who can pay IT professionals more.”

As security issues receive prominent news coverage, companies worry more about ransomware attacks and similar threats. Mollison believes this is part of the reason firms are increasingly looking for in-house IT staff.

“The larger the business, the more complex their systems are, and the more they need IT professionals to manage them,” he explained.

Bean agreed that IT security issues have increased the pressure for companies to be proactive in preventing major disruptions, pointing out that much of the job growth is the result of companies expanding their internal IT staff both regionally and on a national level.

Delcie Bean says an IT workforce that was remarkably stable in 2020 has entered a time of “tremendous transition.”

Delcie Bean says an IT workforce that was remarkably stable in 2020 has entered a time of “tremendous transition.”

“All these companies are doing this because the growing economy gives them a little more money and it can be a luxury to have your IT support in-house.”

Jeremiah Beaudry, owner of Bloo Solutions, agrees, but believes that, after companies build up their internal IT staffing, they usually return to outsourcing with an external service provider once they realize that internal IT is less cost-effective.

“Instead of paying full-time employees to show up every day, companies can hire an IT firm that knows all the technical details and address specific problems when they arise,” Beaudry said. “It would be similar to bringing a plumber on staff. Why would you do that?”

In fact, he predicts that the hiring surge for internal IT will shake out to one or two positions to oversee the main systems augmented by an outside IT service provider.

Bean said it’s common for companies to have an internal person handling technology issues as well as an outside IT service company. “Our biggest source of new business right now involves partnering with internal IT departments to round out what they are doing and give them supplemental assistance.”

 

Here and There

Like many industries right now, technology is grappling with a job market that significantly favors job seekers. Bean told the story of an employee who had previously worked in the defense-contracting industry 10 years ago.

“Because this employee’s name was still in the defense system, a contractor called him to make a job offer, sight unseen and without an interview,” he said. “They literally e-mailed him an electronic salary offer without meeting him, and it was for $35,000 more than he was making here.”

A company located in a large metro area interested in hiring remote workers will offer salaries that are competitive in their market. This can often lead to small-market workers getting big-city paydays.

“If you’re at home and take five minutes between tasks to turn around to pet your dog or do the dishes real quick, that time becomes meaningful and helpful in your life.”

“Usually, when someone makes a salary that’s attractive in Boston, it comes with the high cost of living in the metro Boston area,” Bean said. “When someone with a Western Mass. cost of living makes that same amount, they can see a 30% net increase in their salary.”

Indeed, more companies than ever are embracing remote or hybrid workforces (see related story on page 25). That means IT service providers face the same dilemma confronting many of their clients: continue to work from home or go back to the office.

Mollison tells a slightly different story. Before COVID, he said, Northeast IT was outgrowing its space in Westfield, so he suggested that staff work remotely as a short-term solution. He was surprised when almost no one wanted to work from home.

“Nearly everyone wanted to work in the office,” he recalled. “We have a kind of think-tank environment where our staff enjoy working on problems together.”

However, the pandemic forced nearly everyone to work from home for the last 16 months, a situation Mollison called stressful because many felt less connected to their co-workers. He added that a change in venue is coming. “We purchased a building in West Springfield and will be moving in at the end of August. We’ll have plenty of space to bring everyone back with social distancing; our people are really looking forward to returning.”

At Paragus, employees have been ramping up their return to the office by coming in one day a week in June, two days a week in July, and three days a week starting in August. Bean said he won’t require more than three days a week in the office, but felt that some time in the office was important.

“We have intentionally designed our office to promote collaboration,” he said. “We don’t have walls or offices, so people can listen to each other and overhear what’s going on. You can replicate some of that online, but it’s not the same as hearing what’s going on around you.”

At Bloo Solutions, Beaudry has allowed his four full-time and several part-time employees to stay remote except for occasional trips to the office or when visiting a client’s location. Collaborative messaging tools like Slack and Microsoft Teams allow him and his staff to stay in touch with each other and stay on top of client concerns.

Jeremiah Beaudry says even companies that have built up internal IT

Jeremiah Beaudry says even companies that have built up internal IT staffing often come to see the value in outsourcing that work.

“We have channels dedicated to each client so any one of us can jump in and take care of any concerns,” he said. “Because we all have access to these messages, the same information is available to all of us without being next to each other.”

Whenever possible, Beaudry makes working from home an option for his staff.

“If you’re at home and take five minutes between tasks to turn around to pet your dog or do the dishes real quick, that time becomes meaningful and helpful in your life,” he said. “When you are in the office and not near anything you need to do, that same five minutes is wasted.”

Therefore, as long as his staff are productive, he doesn’t care if they work from home or at the office.

Another reason Bean cited for having people in the office at least some of the time is to help with their professional development and to identify when a staff member might need help. He worries that IT professionals who have chosen full-time remote work won’t have the same chance to grow or develop their careers.

“They will probably be fine doing the job they were hired for, but they will be relatively unengaged and potentially stagnant,” he said. “I don’t see how they can grow or develop much in an environment where they never see their co-workers or be around other people.”

Mollison credits his low staff turnover to seeking out people who like variety in their work and have an interest in personal and professional growth.

“Because IT folks tend to be introverts, we try to help them grow personally so they can become more comfortable working with clients and developing relationships with them,” he said.

While finding people in Western Mass. with technical skills isn’t so tough, Beaudry makes his hiring decisions based on a candidate’s emotional intelligence.

“I’ve learned over time that clients would rather feel good about a conversation they had rather than having an expert solve the problem who makes them feel bad about themselves,” he said.

 

Change Can Be Good

Another reason the demand for IT professionals is increasing has to do with the growing economy. Bean said the sales pipeline for new projects has never been fuller. “In terms of new business, we’re booking clients out to October because we only book so much at a time.”

In addition to hiring temporary contract workers, he has found another way to make up worker shortages: acquisitions. Paragus recently acquired one IT-support company in Worcester and is looking at two other acquisitions.

“In the past, the goal of an acquisition was to acquire clients and market,” he said. “Now it’s about acquiring talent.”

Would Bean like to see less disruption in the labor force? Sure. He also understands that this time of transition is part of the bigger picture.

“Everybody is moving around, so we’re on the receiving end of this as well,” he told BusinessWest. “The good news is we haven’t seen a shortage of any new résumés coming in.”

While it’s tempting to dwell on the employees leaving, however, Bean has gained some perspective.

“After some reflection,” he said, “we realized that a lot of the innovation and fresh approaches we get are driven by new people coming in with new ideas.”

Community Spotlight

Community Spotlight

By Mark Morris

Mark Pruhenski says Great Barrington

Mark Pruhenski says Great Barrington has seen an influx of new residents during the pandemic.

 

On a summer Friday night in Great Barrington, Mark Pruhenski simply enjoyed the sight of dozens of diners eating outside and the sound of musicians playing from various spots around downtown.

Town manager since 2019, Pruhenski said Great Barrington is fortunate to have weathered the pandemic well. He gave much of the credit to a task force formed early on that included town staff and a strong network of partners, including Fairview Hospital, local food banks, and others who lent support.

With its location in the Berkshires, Great Barrington has long been a popular spot for second homes. During the pandemic, many people relocated to their second homes to get away from populated metro areas and work remotely. As time went on, many decided to make Great Barrington their permanent home.

“Along with those who moved into their second homes, we had hundreds of new residents move to the area,” Pruhenski said. “Folks who enjoyed visiting the Berkshires for culture and entertainment were now permanently moving here.”

Betsy Andrus, executive director of the Southern Berkshire Chamber of Commerce, noted that, even at the height of the pandemic, when restaurants and cultural venues were closed, people were still looking for a place to rent or buy. She believes the consistently low COVID-19 infection rates were a strong part of the town’s appeal.

“Along with those who moved into their second homes, we had hundreds of new residents move to the area. Folks who enjoyed visiting the Berkshires for culture and entertainment were now permanently moving here.”

“People from larger metro areas came to Great Barrington in droves,” Andrus said. “You could not keep a house on the market, with some sales happening in only a few hours. Others took a virtual tour and bought sight unseen.”

While admitting it’s difficult to find positives from a worldwide pandemic, Andrus said one benefit was forcing businesses in town to change the way they had been operating.

“I think we were kind of stagnant before,” she said. “Then, suddenly, our businesses had to put a lot of energy into how they could reinvent themselves.”

In addition to sit-down restaurants figuring out how to become takeout places, Andrus pointed to Robin’s Candy Shop, which could no longer allow customers to serve themselves in the shop.

“They moved the store around overnight, so now the staff gets you everything you want,” she said. “Then Robin’s quickly switched over to online sales, which is no small feat, either.”

Great Barrington used its Shared Streets grant

Great Barrington used its Shared Streets grant to develop an outdoor dining area on Railroad Street.

While Great Barrington saw some stores permanently shutter their businesses during the pandemic, Andrus said COVID was not usually the main reason for closing. In some cases, the businesses that did not survive the pandemic were struggling before COVID hit. For others, the pandemic provided the opportunity for owners to change professions or retire.

“We had a huge movement of stores that was similar to musical chairs,” she said. “When a business would close and make their space available, multiple people were trying to sign up for it.”

 

Filling the Gaps

Like musical chairs, there are no empty spaces now in downtown Great Barrington. As a lifelong resident, Andrus said she’s never seen so much activity.

“In some ways, this big shift is the best thing that could have happened,” she noted. “The stores have all settled in to the right locations for what they are selling, and it has really changed the atmosphere in town.”

With retail storefronts full, the second- and third-story office spaces are also reaching full occupancy. Pruhenski hopes the current boom can address a long-term concern in town.

“We’ve always anticipated that Great Barrington would see a population decline over the next decade and beyond,” he said. “It would be great to see the influx of new residents flatten or even reverse that decline.”

While many town halls closed during the pandemic and conducted business remotely, Pruhenski said Great Barrington Town Hall closed only twice, for a month each time. Otherwise, he and his staff came in every day to keep several town projects moving forward.

In 2019, the state Department of Transportation had closed the Division Street bridge. Right now, the project is in the permitting and design phase for a new bridge, which is scheduled to open next summer.

“Everyone was forced to jump out of their comfort zone, and I believe that made us all better for it.”

“Division Street is an important bridge because it links the east side of town to the west,” Pruhenski said. “It’s a shortcut everyone in town likes to use.”

In the northern part of Great Barrington, a private water company serves the village of Housatonic that has been struggling with insufficient water pressure. While Great Barrington doesn’t regulate or own the system, the town is involved to make sure residents there receive clean water and to make sure there is plenty of pressure for firefighters when they need it. Pruhenski said he and the Select Board are looking at several options, including a merger with the town’s water system.

“We were working on this during the pandemic because it has an impact on so many residents,” he noted.

After a transportation service for seniors abruptly closed, town officials took the lead to quickly revive the regional van service that now provides transportation to elderly and disabled residents in Great Barrington and five neighboring towns.

Meanwhile, in the spring of 2020, the town launched a project to paint the downtown crosswalks as a way to recognize diversity in town. Pruhenski said the reaction by residents was more encouraging than he could have expected.

“We just did our little project, and the timing happened to be perfect that the rainbow was being used as a symbol of hope at the height of the pandemic,” he recalled. “After we painted our first crosswalks, people were encouraged to come outside to see them and take pictures with them. It’s been a fun project that’s made everyone happy.”

For 2021, the town added more rainbow crosswalks, and now the entire downtown corridor has replaced its white crosswalks with rainbows.

“People from other communities are calling us because they want rainbow crosswalks in their town,” Pruhenski said. “They are asking us how we did it and where we bought the paint. This project has been so rewarding during such a challenging time.”

For several years, Great Barrington has been pursuing projects to encourage environmental sustainability. One big step was to ban plastic water bottles in town. In return, the town has built three public water stations to make up for the bottle ban.

Another sustainability effort involves the Housatonic Community Center, a popular gym built shortly after World War II. Pruhenski said the center is used a great deal in the winter, so the town has bulked up on insulation and added LED lighting. He hopes to see big savings in energy use and operating costs for the facility.

Great Barrington also has the distinction of hosting the first retail cannabis store in Berkshire County. Theory Wellness opened January 2019 and is now one of four cannabis establishments in town. Pruhenski said sales at all four stores have been strong, and they have returned some welcome revenue to the town.

Great Barrington at a glance

Year Incorporated: 1761
Population: 7,104
Area: 45.8 square miles
County: Berkshire
Residential Tax Rate: $15.99
Commercial Tax Rate: $15.99
Median Household Income: $95,490
Median Family Income: $103,135
Type of Government: Open Town Meeting
Largest Employers: Fairview Hospital; Iredale Mineral Cosmetics; Kutscher’s Sports Academy; Prairie Whale
* Latest information available

“For fiscal year 2022, we were able to use $3.5 million in cannabis revenue to offset taxes,” he noted. “Capital budget items, like new police cruisers that we normally have to borrow for, were paid for in cash thanks to the cannabis revenues.”

The town also collects 3% from cannabis stores to mitigate the negative effects of cannabis on the community. After awarding $185,000 in fiscal 2021, Pruhenski said the town will be awarding $350,000 in fiscal 2022 to five social agencies in the form of community-impact grants.

Andrus agreed that cannabis has had an overall positive impact on Great Barrington.

“Despite all the traffic cannabis brings to town, I’m surprised at how unintrusive it has been,” she said. “For people with health issues, cannabis allows them to live with much less pain.”

 

Hit the Road

When Massachusetts launched the Shared Streets and Spaces Grant Program in June 2020, it was immediately popular across the state. Pruhenski called the program a “silver lining” resulting from the dark cloud of COVID. Great Barrington used its Shared Streets grant to develop an outdoor dining area on Railroad Street to support several restaurants located there. Every Friday and Saturday night in the summer, two-thirds of the street is dedicated to outdoor dining. Pruhenski enjoys seeing Railroad Street turn into a café each weekend.

“When we started this in 2020, vaccines were not yet available, and the only way to dine out was to eat outside,” he said. “Restaurants nearby also use their outdoor space, so it creates a lively downtown experience.”

Andrus said outdoor dining on Railroad Street was a huge effort that was well worth it. “It works great, and people love it. The restaurants want to see this keep going, so they are all taking part.” The town also participates in an effort called Berkshire Busk, in which a dozen entertainers perform at different spots around downtown Great Barrington during the outdoor dining season.

Andrus said the town’s response the to pandemic reminds her of the expression, “don’t waste a good crisis.”

“Everyone was forced to jump out of their comfort zone, and I believe that made us all better for it,” she added. “Because we were all kind of stagnant before the pandemic, it made us try something different.”

Pruhenski would be the first to say that Great Barrington is moving in a positive direction as more people move in, and many are locating their businesses here, too.

“School enrollments are increasing, and Main Street is busier than it’s ever been,” he said. “It’s a really exciting time for the town.”

Accounting and Tax Planning

Where There’s Smoke…

By Kristina Drzal Houghton, CPA, MST

 

Kristina Drzal Houghton

Kristina Drzal Houghton

The production and distribution of cannabis, once known to many only as marijuana, is the newest and most variegated industry in America. Some would even say it is one of the toughest industries in America in which to do business. This article will discuss a few unique challenges from a financial perspective faced by the industry.

The first complexity starts with the difference between cannabis and CBD. When you look at a cannabis plant and a hemp plant side by side, the plants themselves look identical to an untrained eye, making it a bit challenging to identify, as the real difference lies in the chemistry of the plants.

CBD can be extracted from hemp or marijuana. Hemp plants are cannabis plants that contain less than 0.3% THC (the compound that creates the ‘high’ sensation), while marijuana plants are cannabis plants that contain higher concentrations of THC. This article will refer to all products containing more than 0.3% THC as cannabis, while products with less will be referred to as CBD.

So, basically, the only difference from a scientific standpoint is the level of one chemical. However, things are much more complex from a legal and tax perspective. Under the 2018 Farm Bill, CBD and hemp are now legal, and not on the schedule I list of controlled narcotics right up there with heroin and LSD. In 2016, Massachusetts passed a law making all cannabis legal, and all but five other states have passed laws making it either fully legalized, decriminalized, or medically authorized. While cannabis is federally illegal, the Internal Revenue Service is perfectly willing to collect taxes on companies that handle the product.

Federal tax law is very punitive on the cannabis industry. Internal Revenue Code Section 280E is a very short part of the tax code (just one sentence) and states:

“No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by federal law or the law of any state in which such trade or business is conducted.”

Under 280E, you’re not allowed any deductions or credits on your return, but you can deduct the cost of goods sold, as that is part of the definition of taxable income. A cannabis farm will only be allowed to allocate various costs, direct and indirect, into cost of goods sold and inventory. Section 280E will affect only cannabis entities. CBD companies, since they are legal, are allowed all normal business deductions and credits available to other non-cannabis companies. This provides many more opportunities to reduce taxable income to a hemp/CBD company.

It is not only the federal tax difference which significantly attributes to the disproportionate cost of cannabis versus CBD. Due to discrepancies between state and federal law, legal cannabis businesses are forced to operate almost entirely in cash, with very little access to financial services, since most banks are federally insured and therefore unable to establish accounts for this federally illegal business. This leaves thousands of dollars stored in backroom safes and transported in shoeboxes and backpacks, creating a prime target for crime. Another banking challenge that cannabis businesses regularly face is exorbitant monthly account fees, or banks that take a percentage of each deposit.

The industry faces many other challenges as well. For example, most states have a mandated ‘seed to sale’ software-tracking system that must be used and accurate (daily), and must be reconciled with POS (point of sale) systems and accounting systems. Additionally, because this is a new industry, many of the tools other industries use are simply not readily available, including a cannabis-tailored chart of accounts, QB POS systems, reliable inventory software, and common merchant service platforms.

There is an opportunity for dispensaries to separate some revenue streams outside of the cannabis division, meaning normal business deductions are allowed for the non-cannabis division. These might include clothing, paraphernalia, coffee, CBD, and other goods. While this is good news for the industry, it only creates even more complexities when allocating selling and administrative expenses.

A recent report from the U.S. Treasury inspector general for Tax Administration recommends increased audits by the IRS of cannabis businesses to identify potential non-filers and returns that are not 280E-compliant. For this as well as the above reasons, cannabis businesses need to find an accounting firm that really knows what it’s doing. The cannabis accountant has to not only understand Section 280E, but also know how to treat a business that deals strictly (and necessarily) in cash. Many cannabis companies have bad books because their bookkeepers do not understand the special accounting and therefore didn’t properly categorize expenses. It can be time-consuming to fix them.

So, while the many layers of regulatory control and reporting may be of utmost importance to those operating in the cannabis industry, overlooking the complexities in the finance area of the business can lead to the proverbial perfect storm — or the business going up in smoke.

 

Kristina Drzal Houghton, CPA, MST is a partner at the Holyoke-based accounting firm Meyers Brothers Kalicka, P.C.

Modern Office

Best of Both Worlds

Michael Galat says Big Y is scheduling employees in a way that balances the company’s needs with their own.

Michael Galat says Big Y is scheduling employees in a way that balances the company’s needs with their own.

Looking over the past year and a half, Lisa Verville isn’t surprised the O’Connell Companies operated smoothly with the vast majority of its team working from home.

“People have stepped up, they did what they needed to do, and work got done,” said Verville, director of Human Resources for the large family of businesses that includes Daniel O’Connell’s Sons, O’Connell Development Group, Appleton Corp., and New England Fertilizer Corp.

“Now, the technical piece of it — if this happened 20 years ago, I can’t imagine it would have worked as well as it did. We didn’t have Zoom back then,” she added. “But we have a very dedicated team. I’m not surprised it worked well.”

Which is why remote work will continue at O’Connell — to a point. Starting last month, employees were required to work on site at least three days a week, and more if they want to.

“We miss everybody,” Verville said. “We have a great culture, and we don’t want to lose that culture. If people are 100% remote, I think there’s a risk of losing that — do people feel connected to their organization if they’re not here, cooperating and collaborating with their team?”

At the same time, “we know we have to balance that with what’s going on with our workers. We want our employees to be happy and feeling as though there’s a balance. That’s our goal.”

Welcome to the new, hybrid workplace, which looks to be a dominant model for employers across myriad industries, at least for the near future.

“People tell us they can do both,” Verville said. “I think it works, and allows for that work-life balance. I think people appreciate the flexibility.”

Big Y has been operating on a hybrid model for its support-center workers since early in the pandemic, said Michael Galat, vice president of Employee Services. And that will continue.

“Obviously, our stores are open nights and weekends, and our goal, as always, is to make sure we’re taking care of our store employees and our customers at all times,” he said. “Business needs may be different for different positions. It’s finding the right balance — making sure we’re taking care of customers but also allowing our people the autonomy to work from home.”

That’s the thinking at MassMutual as well, said Sue Cicco, head of Human Resources and Employee Experience. The company’s return-to-office approach will balance flexibility with in-person collaboration, with most employees transitioning to a hybrid model, working some days in the office and some days remotely.

Ross Giombetti

Ross Giombetti

“I could see a lot of businesses and leaders getting impatient and frustrated; they want the old way to come back and expect everything to be great. But that’s not how it works.”

“We will also continue to support fully remote and fully in-office arrangements where it makes sense,” she added. “Importantly, this approach is designed to incorporate employee flexibility, so it will look different across the company, depending on role, function, and business needs.”

With most employees working 100% remotely during the COVID-19 pandemic, she explained, “we learned that we can successfully operate in a virtual work environment. That said, we also think there’s value in teams meeting in person to spur creativity, social connection, and collaboration.”

The goal now is to build on the work-life flexibility MassMutual has offered for years, while taking into account employees’ feedback from recent engagement and surveys.

“Similar to how we approach many new situations,” Cicco said, “we’ll assess and evolve our approach as we learn more about what works best for our customers, employees, and company.”

 

Culture of Caring

Ross Giombetti, president of Giombetti Associates — a leadership institute that helps businesses acquire and develop top talent — said the vast majority of his clients are currently maintaining a hybrid model and anticipate sticking with it for at least a while.

“I think most companies realized that, contrary to the initial concerns they may have had, a lot of people were very productive during the pandemic, working remotely, and it actually went a lot better than they thought,” he told BusinessWest. “So a lot of organizations realized that’s here to stay, at least for the foreseeable future.”

At the same time, he added, employers are finding resistance to bringing workers back full-time because remote work has become a habit.

“If you think about how habits are formed and what makes humans comfortable with something, it takes a full 90 days for a new norm or new habit to become part of our routine. Take mask wearing — I would bet most of us took about 90 days to get comfortable and used to wearing a mask.”

Well, many employees stayed home more than five times that long, so the habit has become deeply ingrained, becoming the new norm. Giombetti also noted that many employees told to return to the office, at least part of the time, may be uncomfortable doing so, still fearful of gathering in groups.

Sue Cicco

Sue Cicco

“By making sure our employees have the flexibility to take care of their families, we set off a virtuous cycle where our people are taken care of, and in turn they can take care of their communities, and that extends to how we can take care of our customers.”

In other words, working at home is a hard habit to break, for many reasons. That’s why most businesses are looking at hybrid scheduling as an acceptable option.

“I could see a lot of businesses and leaders getting impatient and frustrated; they want the old way to come back and expect everything to be great,” he said. “But that’s not how it works. A lot of the advice I’m giving people is to be patient with the process, be patient with people returning to work, whether hybrid or fully. When people are back around large groups of people, there will probably be some nervousness, and we need to be understanding of that.”

At Giombetti’s own company in Wilbraham, Fridays are remote days for everyone, and employees can request to work at home any other day they feel they’ll get more done there, with fewer distractions.

“If our team needs that, I encourage it. That’s how we operate,” he said. “I think many organizations understand it’s better to measure results, attitude, and performance than where they’re doing the work from.”

Galat said Big Y’s leadership learned many lessons over the past 17 months.

“One is that we can still be very productive while employees are working from home — there’s an increase in employee productivity when employees are happy. We’ve always considered ourselves a culture of caring, and this [remote work] has helped people balance their personal needs, whether it’s child care, elder care, whatever.

“I also think a big part of productivity is flexibility,” he went on. “Some may log on earlier in the morning, or at times work later at night.”

While working from home saves on travel time and can boost productivity in other ways, he admitted that it’s important that colleagues come in a few days a week to make sure they’re not missing out on the collaborative components of their jobs. Therefore, managers are expected to work on site at least three days a week, and everyone else at least two.

“Again, it depends on the business needs. That’s a very important component of it,” Galat said. “There may be weeks they have to come in every day, and there may be weeks they can work more from home. Each area supervisor works with them to find that balance based on the business needs and what’s going on in their personal life.”

Workers appreciate that kind of consideration, Cicco added. “By making sure our employees have the flexibility to take care of their families, we set off a virtuous cycle where our people are taken care of, and in turn they can take care of their communities, and that extends to how we can take care of our customers.”

 

Culture of Collaboration

That said, companies see value in making sure their workforce is physically present, at least part of the time,

“We think there’s value in both in-person collaboration and the flexibility created by working remotely,” Cicco said, adding that most MassMutual employees responding to surveys or other outreach preferred the hybrid option.

“We’ve learned that, while we appreciate the increased flexibility of remote work, we also miss the value we get from face-to-face meetings, impromptu conversations, collaboration across work groups, and what we learn when we’re together,” she went on. “Not to mention the social aspects — having lunch, bumping into friends around the building, and catching up over a cup of coffee.”

In addition, “we believe the connection that comes with being face-to-face brings energy, encourages innovative thinking, accelerates learning, and strengthens relationships and community,” Cicco noted. “With this in mind, we will encourage work groups to come together regularly, for the benefit of their work and their team.”

Giombetti said most of his clients offering hybrid work stress the need to be physically present at times — brainstorming and working through critical issues at a staff meeting, for instance. “Some things are best done in a room with other people. And most clients have found their employees are totally comfortable with that.”

The other challenge for companies has to do with culture, camaraderie, and the kind of collaboration that can’t be easily achieved over Zoom.

“A lot of organizations are training specifically on that topic,” he said. “While you’re honoring the flexibility of your teammates and employees, it’s important to make sure you can maintain that great culture you’ve built.”

Galat agreed, noting that, while Zoom and similar tools have their place and have been an important piece of keeping staff connected, some collaborations are more effective in person.

“We’re big on culture here — that’s a very, very important part of it. When you don’t see people at least part of the time, it’s hard to strengthen those relationships. It’s all about relationship building, and that goes back to who we are as an organization, caring about employees. Yes, we’re allowing them to work from home, but building relationships with people over the years when we don’t see them some of the time, that’s difficult.”

At the same time, Big Y has prepared a series of best practices for employees working remotely, including the need to take regular breaks. “Productivity is important getting the job done,” Galat said, “but we also want to make sure people are taking some time away as well.”

Giombetti said remote work has allowed some bad habits to creep back in, including a tendency to multi-task to the detriment of the main task.

“If you’re in the office, in the conference room, having a meeting, most of us know it would be foolish to pick up the phone when someone is talking to us because that’s just rude,” he explained, noting that it happens much more often during a Slack, Teams, or Zoom meeting. “Unfortunately, the last year and a half maybe caused us to retrench a little bit, and the amount of multi-tasking has increased. We have to guard against that.”

 

Unexpected Absence

Verville remembers the week in March 2020 when O’Connell’s Holyoke headquarters emptied for what most employees thought would be a temporary detour home.

“People did what they needed to do. There was a real commitment there,” she said. “But I personally didn’t think it would last this long. I think most people left the office and said, ‘see you in a couple weeks.’ No one thought it would be this long. And I missed everyone, so it’s great to get back to some sense of normalcy, if you will.”

That new norm seems to be an understanding among employers that their workers value flexibility, but also that the workplace culture will suffer without some face-to-face collaboration.

“It’s a hard balance,” Giombetti said, “but I think organizations that are intentional about it do it best; that’s the recipe for success.”

It could also be a recipe to attract talent at a time when many companies are struggling with hiring and retention, as many potential workers would be more amenable to a hybrid schedule than five days a week away from home.

“It’s about being able to attract and retain the top talent and finding that balance between supporting the stores — providing the tools to get their jobs done — and being accessible so that people say, ‘hey, I can work at home, and they care about me — I can take care of my family’s needs as well,’” Galat said. “It’s all about the workplace culture, and work-life balance is part of it. We want the best of both worlds.”

 

Joseph Bednar can be reached at [email protected]

Technology

Life on the Cutting Edge

An on-the-go society demands on-the-go technology, and today’s array of high-tech devices — available at all price points — offer users new ways to make their home lives more efficient, manage their work, boost their health, and, well, just have fun in more eye-popping, ear-tickling ways than ever. In its annual look at some of the hottest tech items available, BusinessWest dives into what the tech press is saying about some of 2021’s buzziest items.

 

When compared to many of the other cool tech gadgets on this list, the Amazon Smart Plug ($25) “might seem underwhelming, but you might be impressed with how much you like this smart-home accessory once you start using it,” according to spy.com. “Head out on vacation and can’t remember if you left a fan or window AC unit running? If it’s plugged into this, you can simply open up your Alexa app and cut off the power. Have a lamp that you love, but it doesn’t work with a smart bulb? Use one of these to make a dumb lamp very, very smart. On top of all that, Alexa has some impressive power-monitoring tools, so that if you have more than one of these around your home, you can figure out which appliances and electronics around the house are costing you the most money, and you can adjust your usage behavior accordingly.”

 

Meanwhile, the same site says the Anker Nebula Solar Portable Projector ($520) won’t replace a fancy, 65-inch, 4K HDR TV, “but for those moments when you’re really craving that movie-theater experience at home … you’ll understand why this made our list of cool tech gadgets.” The projector boasts easy setup, too. “Barely bigger than a book, you can point it at a wall and have it projecting a 120-inch, 1080p version of your favorite Netflix movie without needing to configure the picture settings or find a power outlet.”

 

Speaking of projectors, the BenQ X1300i 4LED Gaming Projector ($1,299) is being marketed as the first true gaming projector that’s optimized for the PS5 or Xbox Series X. “The 3,000-lumen projector will play 1080p content — so not true 4K content — at extremely low latency, which is needed for competitive gamers,” according to gearpatrol.com. “Additionally, it has built-in speakers and an Android TV operating system, so it functions as any traditional smart TV — but it can create up to a 150-inch screen.”

 

Taking tech outdoors is the DJI Mavic Air 2 Drone ($799), which menshealth.com touts for its massive optical sensor, means “the 48-megapixel photos pop and the hyperlap video is 8K — smart futureproofing for when your TV plays catchup. The next-gen obstacle-avoidance sensors, combined with the 34-minutes-long flight time, mean you spend more time shooting killer video and less time dodging trees and buildings.”

 

Smart wallets offer a convenient way to store and transport cash and credit cards while protecting against loss or theft. The Ekster Parliament Smart Wallet ($89) is a smart bifold wallet with RFID coating (to protect against identity theft) and a patented mechanism that ejects cards from its aluminum storage pocket with the press of a button. It has space for at least 10 cards, as well as a strap for carrying cash and receipts, according to bestproducts.com. “Ekster has crafted the wallet from high-quality leather that comes in a multitude of colors. An optional Bluetooth tracker for the wallet is also available. This ultra-thin gadget has a maximum range of 200 feet, and it is powered by light, so it never needs a battery.”

 

In the smartwatch category, the Fossil Gen 5 LTE ($349) is the company’s first product in the cellular wearables market, crn.com notes. “The Fossil Gen 5 LTE Touchscreen leverages LTE connectivity from Verizon, the Qualcomm Snapdragon Wear 3100 platform, and Google’s Wear OS to let users make calls and do texting without a mobile phone.” Fossil also makes what bestproducts.com calls the best hybrid smartwatch, the Fossil Latitude HR Hybrid Smartwatch ($195), “a feature-packed hybrid smartwatch with a built-in, always-on display and a heart-rate sensor. We like that, instead of looking like a tech product, it resembles a classic chronograph timepiece with mechanical hands and a three-button layout. The Latitude HR can effortlessly deliver notifications from your phone and keep tabs on your activities.”

 

“We don’t know who will be more excited about the Furbo Dog Camera ($169), you or your pet,” popsugar.com notes. “You can monitor them through your phone, send them treats when you’re away, and so much more.” The 1080p, full-HD camera and night vision allows users to livestream video to monitor their pet on their phone with a 160-degree wide-angle view, day and night. A sensor also sends push notifications to a smartphone when it detects barking. Users can even toss treats to their dog via the free Furbo iOS/Android app. Set-up is easy — just plug it in to a power outlet using its USB cord, download the Furbo app, and connect to home WiFi.

 

“As one of the first companies to make artificial intelligence and voice-recognition technology available to the average person, spy.com notes, “Google is still the top dog when it comes to voice assistants and smart-home platforms. And perhaps its most radical move was the Google Nest Mini ($35), a small and cheap speaker that is fully imbued with the powers to command your smart home. Once you get used to the particular ways of interacting with a voice assistant, it’s rare when you have to raise your voice or repeat yourself to get the Nest Mini to understand you, even when you’re on the other side of the room, half-asleep at 1 a.m., telling it to turn off the lights, shut off the TV, and lock the doors.”

 

Tired of housework? “If you’re a fan of the iRobot vacuum, then you’ll want to give the iRobot Braava Jet 240 Robot Mop ($180) a try,” popsugar.com asserts. “It will clean your floors when you’re not around, so you have nothing to worry about later.” The device claims to offer precision jet spray and a vibrating cleaning to tackle dirt and stains, and gets into hard-to-reach places, including under and around toilets, into corners, below cabinets, and under and around furniture and other objects, using an efficient, systematic cleaning pattern. It also mops and sweeps finished hard floors, including hardwood, tile, and stone, and it’s ideal for kitchens and bathrooms.

 

Smart glasses are a thing these days, too. Jlab Audio recently introduced its new Jlab JBuds Frames ($49), a device that discretely attaches to a user’s glasses to provide wireless stereo audio on the go. “The JBuds Frames consist of two independently operating Bluetooth wireless audio devices, which include 16mm drivers that produce sound that can only be heard by the wearer, not by others,” according to crn.com. “In addition, the device can easily be detached and mounted on other frames when needed.”

 

For a next-level experience in eyewear, “virtual reality might be taking its time to have its ‘iPhone moment,’ but it is still very much the next big thing when it comes to the coolest tech gadgets,” spy.com notes, “and there is not a single VR device that flashes that promise more than the Oculus Quest 2 ($349).” Without the need for a powerful computer or special equipment, users can simply strap the Quest 2 to their head, pick up the controllers, and move freely in VR space thanks to its inside-out technology, which uses cameras on the outside of the headset to track movement. “In a time where we don’t have many places to escape to, the Oculus Quest 2 offers up an infinite number of destinations … even if they’re only virtual.”

 

Another way to escape into another world — albeit one requiring more effort — is the Peloton Bike+ (from $2,495). “Peloton’s updated bike boasts a lustrous, 24-inch-wide screen and a game-changing multi-grip handlebar that lets you always find comfortable position,” menshealth.com notes. “And the best feature just may be auto-follow, which automatically shifts the resistance when the instructor calls for it. Translation: no escape from tough workouts.”

 

Speaking of devices with health benefits, the Polar Verity Sense optical heart monitor ($90) can be worn on the arm or temple (for swimming). “It’s designed for people who don’t necessarily wear a wrist-bound fitness tracker or smartwatch, or are doing an exercise that isn’t very friendly to wrist jewelry, like martial arts, swimming, dancing or boxing,” gearpatrol.com notes. “It’s a nifty accessory for people who use Polar Flow, Polar’s free fitness and training app, or wear one of the company’s smartwatches.”

 

Meanwhile, gearpatrol.com is also high on the Ring Video Doorbell Pro 2 ($250), the next-generation version of its well-reviewed video doorbell — and it adds two big upgrades. “First, it adds a new radar sensor that enables new 3D motion detection and bird’s-eye-view features; this allows it to better detect and even create a top-down map of the movement taking place in front of your door. And, secondly, the camera has an improved field of view so that it can capture the delivery person’s entire body — head to toe — when they drop off a package.”

 

Finally, are you looking for great sound for home entertainment? With Sonos Arc ($799), users can “get immersive audio that can fill an entire house in one slim, sleek, ultra-versatile package,” menshealth.com notes. “A whopping 11 drivers power Sonos’ newest soundbar, fueling a surround-sound experience that delivers in all situations, whether you’re playing Halo or watching Avengers: Endgame.”

 

Employment Special Coverage

Questions, Questions

 

At a time when most companies and nonprofit institutions in the region are hiring, or trying to, many area business owners, managers, and HR directors are sitting across the table from job candidates trying to determine if that individual is the proverbial ‘right one.’

Given this climate, BusinessWest asked a number of area business leaders to identify one of their favorite, most effective interview questions. We asked them to explain why they ask that question and what it reveals to them about the candidate.

Suffice it to say, their responses provide some food for thought on a very important part of business.

 

 

Sara Rose Stack

Sara Rose Stack

Sara Rose Stack, Marketing & Recruiting Manager, Meyers Brothers Kalicka

The question: “Tell me something that you would do differently than your current boss at your current job.”

I ask this question to learn more about candidate’s awareness of people around them, their creative problem-solving skills, their desire to improve and grow, and their level of tact. A candidate’s answer to this question will reveal a lot about his/her ability to solve problems, but what I am most interested in is how they communicate their proposed solution. The question itself has a somewhat negative connotation because it is asking for the candidate to share something that their boss could do better or differently. My experience has shown that, if someone will bash a supervisor or competitor to you, then they will repeat the behavior to others. Further, anyone that can share suggestions for improvement in a positive way is a great addition to the team. Tact and diplomacy are powerful tools for making improvements, contributing ideas, and working in a team.

 

Sandra Doran

Sandra Doran

Sandra Doran, President, Bay Path University

The question: A two-parter: “How will this position help you grow your career?” “Tell me about an experience or work project where you had to work across departments to accomplish the goal(s).”

 

In the first part of the question, I am looking for authenticity of the candidate and the ability to be introspective and share their current strengths as well as their vulnerabilities. As their experience grows, their value as contributors to Bay Path will also increase. The second question provides insights to their capacity to be a team player and team leader within our organization. Today, 40% of Bay Path students are students of color, and we are striving to increase the diversity of our employees. As a result, as the candidate explains the project, I am looking for how they respect and handle other opinions and perspectives, value diversity of thought, and exhibit multi-cultural competencies. Above all, the candidate must be both mission- and student-centered.

 

Brenda Olesuk

Brenda Olesuk

Brenda Olesuk, President, Graduate Pest Solutions Inc.

The question: “What do you consider to be your professional and personal strengths, and, conversely, what areas do you struggle with or are not interested in doing professionally?”

 

This is a mainstay question in all of my interviews since it encourages the applicant to be introspective and reflective about themselves — and this tells me a lot about them. Learning what they consider to be their professional strengths and how they’ve applied those strengths often creates context for what they can and will bring to the table in the position they are applying for. Perhaps more important to me is the level of candor with which they communicate areas of struggle or lack of interest and how they have managed this in their career. This question often leads to an additional discussion that unveils the applicant’s openness to coaching and development, which is a trait that is important to me as a leader, manager, and employer.

 

 

Ellen Freyman

Ellen Freyman

Ellen Freyman, Esq., Partner, Shatz, Schwartz and Fentin, P.C.

The question: “What would make you satisfied in this job?”

 

This question lets the applicant know that we care whether our employees are happy working for us, and at the same time, it helps us determine if this applicant will be a good fit. It is also another way of finding out the applicant’s strengths without asking directly, and discloses what part of the job they may not care to do. The answer to this question can reveal why the applicant hasn’t stayed in previous jobs and potentially lead us to rethink some of the things we are doing in our office. The question helps us determine if the applicant understands the position they have applied for and if they have the right skill set. Getting an honest answer to this question helps both the applicant and us know whether hiring this person will be satisfying to both of us.

 

Carla Cosenzi

Carla Cosenzi

Carla Cosenzi, President, TommyCar Auto Group

The question: “How do you delegate responsibilities to team members?”

 

I ask this question to potential hiring candidates because most managers fail at delegation. As a good leader, it is their responsibility to be clear about what they are delegating and their expectations. In our company, it is our manager’s responsibility to offer their team the tools they need to succeed by encouraging and supporting the decision-making environment. The effective delegation and empowerment of their employees is essential for their success as a manager. By asking this question, I am able to learn if a potential candidate is able to release control and effectively delegate, empower, and hold accountable their future team members.

 

Pia Kumar

Pia Kumar

Pia Kumar, Chief Strategy Officer, Universal Plastics

The question: “Why did you leave your last job?” Or, if they are still employed, “Why are you looking to leave this job?”

 

As an employer, I value continuity and longevity in job history. However, the résumé is just a piece of paper. The interview is the opportunity to either rise above what the piece of paper says or minimize it. How someone discusses a job change tells me whether they are a team player, whether they are growth-mindset-oriented, and what kinds of cultures, people, and attributes they either enjoy or don’t. In short, it is the ‘heart’ (as opposed to the ‘head’) part of the interview, which answers the most important question of all for me — do I want this person on my team?

It is never easy to leave a job, whether you do it on your own terms or have been asked to do so. So, how you answer this question brings up your response to a difficult situation, which may even involve conflict or confrontation. As an employer, I want to know how you handle difficult situations. At Universal Plastics, we believe in giving people chances, lots of them, but it has to start from a place of candor and commitment to our culture and the values we espouse, and this question aims to ascertain exactly that.

 

Michael Matty

Michael Matty

Michael Matty, President, St. Germain Investments

The question: “What did your parents do?”

 

I like to ask this because we are all a product of our background, and it is a great opportunity to gain some insight into the person. If, for example, the parents ran their own business, the candidate probably has a good understanding of the needs of a small business and what it takes to make it work. It is also a good opportunity to ask why the candidate doesn’t want to work there. Conversely, the mom may have been stay-at-home, and dad worked in a factory job in a blue-collar role. The candidate may be first-generation college and first-generation in a professional role — sometimes a bit less polished in presentation, but likely with good reason. And if they are smart, energetic, and willing to learn, I’d potentially think they were a good hire. Overall, it’s a good, open-ended question that can lead to some good conversation.

 

Jane Albert

Jane Albert

Jane Albert, Senior Vice President and Chief Consumer Officer, Baystate Health

The question: “What impact has the pandemic had on you?

 

This is a newer question I ask because it opens the door to conversation about a current topic of significance with many pathways to get to know the candidate. Asking a broad, open-ended question provides the candidate with a choice to respond with an orientation toward their personal life or their work experiences. like to provide that option to make it most comfortable for the candidate during the interview. This question enables conversation about how they handled changes and challenges related to the pandemic and offers glimpses into how they may handle and adjust to changes within our healthcare environment and their potential new work responsibilities. It also opens the door to learning about the candidate’s priorities, relationships, engagements, and abilities to adapt to change, along with how they handled this in their daily life as well as throughout their work experiences.

 

 

Kate Campiti

Kate Campiti

Kate Campiti, Associate Publisher and Sales Manager, BusinessWest

The question: “Have you had experience in the service industry?”

 

When I interview for sales, I look for — and ask about — experience in the service industry. If the candidate has it, I ask how they’ve handled a tough customer or table and how they turned it around or were able to shake it off to continue successfully serving the rest of the shift. If candidates can wait tables or bartend successfully, it shows they have what it takes to think on their feet, appeal to customers, and provide high-level service to earn tips. It also shows they are driven by both money and customer service, which bodes well for a sales position with BusinessWest. For other positions, I typically ask what motivates them, what they do to unwind, if they have tactics for stress relief inside and outside the office, and what they think their best assets and weaknesses are and what they think their current or previous employers would say.

Business of Aging Special Coverage

House Calls

While the pandemic may have challenged the home-care industry, it certainly didn’t suppress the need for such services. In fact, demographic trends in the U.S. — where about 10,000 Baby Boomers reach age 65 every day — speak to continued, and growing, demand for care services delivered in the home. That means opportunities both for agencies who specialize in this field and job seekers looking for a rewarding role and steady work.

Michele Anstett says business was like “falling off a cliff” when COVID hit, but client volume has returned to normal.

Michele Anstett says business was like “falling off a cliff” when COVID hit, but client volume has returned to normal.

By Mark Morris

In early 2020, Michele Anstett, president and owner of Visiting Angels in West Springfield, was pleased because her business was doing well. As a provider of senior home care, she managed 80 caregivers for 50 clients.

“We were going along just fine,” she said. “And when COVID hit, it was like falling off a cliff.”

The business model for companies like Visiting Angels involves interacting with people in their homes, so when early mandates encouraged people to keep away from anyone outside their immediate ‘bubble,’ it hit the industry hard.

Even though caregivers were designated as essential workers, Anstett saw her numbers shrink to 39 caregivers who were now responsible for only 19 clients. In order for her business to survive, she continued to provide services for her clients who needed personal-care services around the clock and for those who had no family members in the area.

“Where possible, we asked family members to step in to help out,” she told BusinessWest. “At the beginning of the pandemic, there was less risk to everyone when a family member could be involved with their loved one’s care.”

Anstett also incorporated a detailed checklist of risk factors for each caregiver to review to prevent COVID-19 from spreading to them or their clients.

“I thought patients weren’t following up because of a language barrier. As it turns out, they weren’t responding because they didn’t understand the severity of the situation.”

“We talked with caregivers about the people in their circle,” Anstett said. “It was similar to contact tracing, but we did it beforehand, so people would understand what they had to consider to protect themselves, their families, and their clients.”

A Better Life Homecare in Springfield runs two home-care programs. In one, it provides personal-care services such as helping seniors with grooming, cooking, laundry, and more. The other program provides low-income patients with medical care in the home, such as skilled nursing services, occupational therapy, and physical therapy.

On the medical side of the business, licensed practical nurses (LPNs) handle many of the home visits, while certified nursing assistants (CNAs) and patient care assistants (PCAs) are the main frontline workers on the personal-care side. A Better Life also employs case workers to supervise PCAs and CNAs and to set up other resources a patient may need, such as Meals on Wheels and support groups.

When COVID hit, said Claudia Lora, community outreach director for A Better Life, she and her staff made patient communication a top priority.

Claudia Lora

Claudia Lora says communication with clients was key to navigating the pandemic.

“We implemented daily phone calls to our patients that also served as wellness check-ins,” she recalled. Because a majority of the company’s clients are Spanish speakers, A Better Life employs many bilingual staff. At the beginning of their outreach efforts, Lora became concerned when some patients didn’t seem to follow up and respond to communications.

“I thought patients weren’t following up because of a language barrier,” she said. “As it turns out, they weren’t responding because they didn’t understand the severity of the situation.”

On the other hand, she said some patients temporarily stopped their home-care service out of concern about interacting with anyone in person. The system of daily phone calls helped address patient concerns and keep them current on their treatments. In addition, patients received whimsical postcards to lift their spirits and care packages of hygiene products and food staples.

“The pandemic opened our eyes in different ways,” Lora said. “It made us aware that we needed a system of daily phone calls in both programs, which we will continue even after the pandemic is no longer a concern.”

 

Growing Need

The lessons home-care agencies learned from the pandemic — some of which, as noted, will lead to changes in how care is provided — come at a time when the need for home-based services is only increasing.

That growing need is due in part to people living longer, of course. According to government data, once a couple with average health reaches age 65, there is a 50% chance one of them will live to age 93, and a 25% chance one of them will see age 97. With the increased longevity, there is also a greater chance these seniors will need some type of assistance with daily chores or treating a malady.

Receiving care at home, with an average cost nationally of $3,800 per month, is less expensive than moving into a nursing home (approximately $7,000 per month), and nearly everyone would rather stay in their home. When seniors need assistance, Anstett said, they often rely on family members out of fear of having an outside person come into their home.

Now that concerns about COVID are easing, she reports that people are increasingly more willing to have someone come in to their home to help, but there are still some who resist. “I wish they could understand we are not there to take away their independence, but to give them more independence.”

Lora said some of her patients were reluctant to allow people to come into their homes until they considered the alternatives.

“The only other option for people receiving medical care would have been checking into a skilled-nursing facility or a nursing home,” she noted. “I knew that was the last place they wanted to go.”

She added that the extensive news coverage of high rates of COVID in nursing homes and the high case rate locally at the Holyoke Soldiers Home convinced most people that care at home was a wise choice.

Anstett and Lora both pointed out that their companies always make sure anyone providing home care wears appropriate personal protective equipment and follows the latest guidelines for preventing the spread of COVID. Anstett said she encourages her caregivers to get vaccinated, but doesn’t force the issue because she recognizes some people have health issues.

“However,” she added, “I make it clear to the unvaccinated folks that the pool of clients willing to see a caregiver who is not vaccinated is fairly small.”

While the pandemic may have slowed down business in the short term, demographic trends still remain strong for the years ahead. According to U.S. Census Bureau data, about 10,000 people reach age 65 every day. This trend is expected to continue until 2030, when all living Baby Boomers will be at least 65 years old.

 

Looking Ahead

Fifteen months after the chaotic early days of the pandemic and with many people now vaccinated, Lora said A Better Life is busier today than before the pandemic.

“In the last six months, admissions have increased by around 50%,” she noted. “That’s more than I have seen in the past three years; it’s been insane.”

She added that her company is now short-staffed because of the rapid growth it is seeing and has been offering incentives to try to bring more CNAs and PCAs on board.

Anstett said her client numbers and caregiver numbers are back to where they were before the pandemic and noted that she has not had any problem filling open positions.

“I just cut 80 paychecks, and we are anticipating even more growth,” she said, adding that her secret to hiring is treating caregivers with respect and encouraging them to grow in their careers. “I stay in touch with every one of our caregivers. They’re the reason I’m working, so I treat them with the utmost respect.”

While many professions look to push out older workers, Anstett said she appreciates more seasoned workers and looks forward to hiring them. “Caregiving is an opportunity to keep working for those who want to, and we welcome their experience.”

Pointing out that she hired another case manager last week, Lora added that, while her organization is expanding, it has not forgotten its mission.

“Even with our growth,” she said, “we see our patients as part of a family and a community, not just a number.”

Franklin County Special Coverage

All Aboard

The Greenfield Amtrak stop

The Greenfield Amtrak stop will be busier this month with the restoration of Vermonter service and a second Valley Flyer train. Photo courtesy of Trains In The Valley

While a proposed east-west rail line between Pittsfield and Boston has gotten most of the train-related press recently, another proposal, to incorporate passenger rail service on existing freight lines between North Adams and Boston, has gained considerable momentum, with a comprehensive, 18-month study on the issue set to launch. Not only would it return a service that thrived decades ago, proponents say, but expanded rail in the so-called Northern Tier Corridor could prove to be a huge economic boost to Franklin County — and the families who live there.

 

State Sen. Jo Comerford has spoken with plenty of people who remember taking a train from Greenfield to North Station in Boston to catch Bill Russell’s Celtics.

They stepped on at 2:55 p.m. — one of as many as 12 boardings on any given weekday — and the train was already half-full after stops in Troy, N.Y., North Adams, and Shelburne Falls. Then they’d arrive at North Station at 5:15, “and you’d still have time for dinner before the game started,” Comerford said. “That was our reality in Franklin County in the 1950s.”

She shared those words last week at a virtual community meeting to discuss a comprehensive study, soon to get underway, of passenger rail service along the Northern Tier Corridor, a route from North Adams to Boston via Greenfield, Fitchburg, and other stops.

Ben Heckscher would love to see expanded train service in Western Mass.; as the co-creator of the advocacy organization Trains In The Valley, he’s a strong proponent of existing lines like Amtrak’s Vermonter and Valley Flyer, north-south lines that stop in Greenfield, as well as more ambitious proposals for east-west rail, connecting Pittsfield and Boston along the southern half of the state and North Adams and Boston up north.

Like Comerford, he drew on the sports world as he spoke to BusinessWest, noting that travelers at Union Station in Springfield can order up a ticket that takes them, with a couple of transfers, right to the gates of Yankee Stadium in the Bronx. “But there’s no button to push for the Red Sox,” Heckscher said. “It seems funny — we’re in Western Mass., and you can take a train to see the Yankees, but you can’t get to Fenway.”

But sporting events aren’t highest on his list of rail benefits. Those spots are dedicated to the positive environmental impact of keeping cars off the road, mobility for people who don’t own cars or can’t drive, and the overall economic impact of trains on communities and the people who live and work in them.

People want to access rail for all kinds of reasons, Heckscher said, from commuting to work to enjoying leisure time in places like New York, Philadelphia, and Washington without having to deal with navigating an unfamiliar city and paying for parking. Then there are medical appointments — many families living in Western Mass. have to get to Boston hospitals regularly, and don’t want to deal with the Mass Pike or Route 2 to get there.

“People are just really tired of driving Route 2 to Boston, especially at night or in the winter, and they want another way back and forth,” he said. “So they’re going to do a really robust study, and we’ll see what comes of that.”

In addition, as the average age of the population ticks upward, many older people might want to travel but be loath to drive long distances. In fact, that kind of travel is increasingly appealing to all age groups, Heckscher added. “You can ride the train, open your computer, take a nap. You can’t do that operating a car — at least not yet. So, rail definitely has the potential to become even more important.”

State Rep. Natalie Blais agrees. “We know the residents of Central and Western Mass. are hungry for expanded rail service. That is clear,” she said at last week’s virtual meeting. “We are hungry for rail because we know these connections can positively impact our communities with the possibilities for jobs, expansion of tourism, and the real revitalization of local economies.”

Ben Heckscher

Ben Heckscher

“People are just really tired of driving Route 2 to Boston, especially at night or in the winter, and they want another way back and forth.”

Makaela Niles, project manager for the Northern Tier study at the Massachusetts Department of Transportation, said the 18-month study will evaluate the viability and potential benefits of rail service between North Adams, Greenfield, and Boston.

The process will document past efforts, incorporate market analysis (of demographics, land use, and current and future predicted travel needs), explore costs and alternatives, and recommend next steps. Public participation will be critical, through roughly seven public meetings, most of them with a yet-to-be-established working group and a few focused on input from the public. A website will also be created to track the study’s progress.

“We know it’s critical that we have stakeholders buying in,” said Maureen Mullaney, a program manager with the Franklin Regional Council of Governments. “We look forward to having a very robust, inclusive participation process.”

 

Making Connections

Comerford has proposed rail service along Route 2 as a means for people living in the western counties along the corridor to more easily travel to the Greater Boston region, and a means for people living in the Boston area to more easily access destinations in Berkshire, Franklin, and Worcester counties. In addition to direct service along the Northern Tier, the service could provide connecting service via Greenfield to southern New Hampshire and Vermont.

The service would operate over two segments of an existing rail corridor. The first segment, between North Adams and Fitchburg, is owned by Pan Am Southern LLC. The second segment, between Fitchburg and Boston North Station, is owned by the Massachusetts Bay Transportation Authority (MBTA). Any new service would be designed so that it does not negatively impact the existing MBTA Fitchburg Line commuter rail service or the existing freight rail service along the entire corridor.

State Sen. Jamie Eldridge asked Niles at last week’s meeting about potential tension between freight and passenger interests and whether commuter times will be thrown off by the needs of freight carriers.

“We’ll be looking at how those two intersect and make sure any additional service that could occur along the corridor doesn’t impact with freight or current commuter operations along the corridor,” Niles responded. “We’ll look at how all the services communicate and work together.”

Other potential study topics range from development of multi-modal connections with local bus routes and other services to an extension of passenger rail service past North Adams into Adams and even as far as Albany, although that would take coordination with officials in New York.

“My hope is that these communities would suddenly become destination spots for a whole new market of people looking to live in Western Massachusetts and work in Boston.”

Comerford first introduced the bill creating the study back in January 2019, and an amendment funding it was included in the state’s 2020 budget, but the COVID-19 pandemic delayed the start of the study until now.

And it’s not a moment too soon, she recently said on the Train Time podcast presented by Barrington Institute, noting that rail service brings benefits ranging from climate effects to economic development to impact on individual families who want to live in Franklin County but work in Boston (see related story on page 39).

With average salaries lower than those available in Boston often making it difficult to settle in Franklin County, availability of rail affects people’s job prospects and quality of life, she noted.

“My hope is that these communities would suddenly become destination spots for a whole new market of people looking to live in Western Massachusetts and work in Boston,” Comerford said, noting that, longer-term, she hopes to see greater business development in Western Mass. due to expanded rail, as businesses that need access to Boston, Hartford, and New York could set up shop here and access those cities without having to deal with traffic.

The bottom line, she said, is that it’s environmentally important to get cars off the road, but there are currently too many gaps in public transportation to make that a reality.

“There was a time when you could work in Boston and live in Franklin County,” she said. “I’ve heard story after story about what life was like up until about the late ’60s. It changed abruptly for them.

“When I was elected, one of the first things I researched was passenger rail along Route 2,” she went on. “I thought, ‘we have to explore starting this again. This is really important.’”

 

Chugging Along

Of course, east-west rail is only part of the story right now in Western Mass. Running north-south between New Haven and Greenfield are Amtrak’s Valley Flyer and Vermonter lines.

On July 26, Amtrak will restore a second train to its daily Valley Flyer service 16 months after cutting a train due to COVID-19. Southbound trains will depart Greenfield at 5:45 a.m. and 7:35 a.m., and northbound trains will return to the station at 10:23 p.m. and 12:38 a.m.

The Vermonter will return to service in Massachusetts on July 19. A long-distance train originating in Washington, D.C., it has gone no further north than New Haven since March 2020, also due to the pandemic. Amtrak is also reopening three other trains which offer service between New Haven and Springfield.

According to Amtrak, ridership on the Valley Flyer fell by more than half at the Holyoke, Northampton, and Greenfield stations in 2020, but the company is optimistic it will return to past numbers. That’s critical, since the Flyer is part of a DOT and Amtrak pilot program, which means its funding depends on its ridership. The Pioneer Valley Planning Commission (PVPC) will launch an advertising campaign this fall in an effort to boost interest in the service.

“The pandemic really tanked ridership — all forms of public transportation, actually,” said Heckscher, noting that most travelers felt much safer in their cars last year than among groups of people. “But since the vaccine came out, there’s been a comeback in ridership in the Valley Flyer service.”

MJ Adams, Greenfield’s director of Community and Economic Development, said the city has been waiting a long time for the Valley Flyer, “and we don’t want to be just a pilot.”

She feels the city, and the region, will benefit from a perception that people can get anywhere from the Greenfield area, and they may be more willing to move there while continuing to work in the city. Many of those are people who grew up in Franklin County and have a connection to it but still want to feel like they can easily get to work far away or enjoy a day trip without the hassle of traffic or parking.

There’s an economic-development factor related to tourism as well, Adams said. “People in New York City, Hartford, or New Haven can spend the day up here in the country — it’s not just us going down to New York, but people from New York who get on a train, enjoy a nice stay in rural Massachusetts, have a blast, and get back on the train to go home. It’s a two-way street.”

A recent report commissioned by Connecticut’s Capitol Region Council of Governments (CRCOG), in consultation with the PVPC, reinforced the idea of rail as an economic driver, finding a nearly 10-to-1 return on investments in passenger rail between New Haven and Worcester via the Hartford-Springfield metro area.

“In so many ways, the findings of this study confirm what we have seen with our own eyes for decades here in the Valley — regions connected by rail to the major economic hubs of Boston and New York City are thriving, while underserved communities like ours have lagged behind,” PVPC Executive Director Kimberly Robinson said. “We now know what the lack of rail has cost us economically, and this trend cannot continue further into the 21st century.”

Though she was speaking mainly of proposed routes along the state’s southern corridor, Heckscher believes in the economic benefits — and other benefits — of numerous projects being discussed across Massachusetts, including along Route 2.

“With rail, everyone has the ability to travel long distances,” he said — and the impact, while still uncertain in the details, could prove too promising to ignore.

Joseph Bednar can be reached at [email protected]

Employment

Get the Vaccine or Get Fired?

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

 

To mandate the COVID vaccine, or not to mandate?

John S. Gannon, Esq

John S. Gannon, Esq.

Meaghan E. Murphy, Esq

Meaghan E. Murphy, Esq.

That is the question on the minds of employers across the globe. As employment lawyers, we have been asked that question countless times by clients (and friends). Until about a month ago, all we could do was provide our best guess based on guidance and legal decisions related to other vaccines, like the flu shot. However, on May 28, the U.S. Equal Employment Opportunity Commission (EEOC) provided some comprehensive COVID-19 guidance that addresses this topic head-on.

The EEOC is the federal agency that enforces anti-discrimination laws applicable to workplaces. The news is good for Massachusetts employers considering a mandatory vaccine program. Some of the key takeaways for employers are described below.

 

Mandatory Vaccinations

The EEOC guidance declares in no uncertain terms that an employer can lawfully require employees to obtain a COVID-19 vaccination as a condition of returning to the workplace. Such a practice would not run afoul of the Americans with Disabilities Act (ADA) or the Genetic Information Non-discrimination Act (GINA). There is one big catch: an employer mandating vaccines must reasonably accommodate employees who are unable or unwilling to get vaccinated because of a disability or sincerely held religious belief.

These employees might need to be excepted from the vaccine mandate if other safety measures can keep them and others safe. The EEOC provided examples of such accommodations, including requiring an employee to continue to wear a mask and socially distance while in the workplace, limiting contact with other employees and non-employees, providing a modified shift, permitting continued telework if feasible, conducting periodic COVID testing, or reassigning the employee to a vacant position in a different workplace.

Notably, employers should not assume that an employee does not require an accommodation relating to COVID simply because the employee is fully vaccinated. The guidance provides that an employer may need to accommodate an employee who is fully vaccinated for COVID if there is a continuing concern for heightened risk of severe illness from a COVID infection.

For an employee who is unwilling to obtain the vaccination because of a sincerely held religious belief under Title VII, employers should presume that the request is legitimate. The EEOC does make clear, however, that if an employee requests a religious accommodation, and an employer is aware of facts that provide an objective basis for questioning either the religious nature or the sincerity of a particular belief, practice, or observance, the employer would be justified in requesting additional supporting information.

Employers presented with this issue should proceed with caution, as the EEOC will take a narrow view of such circumstances. Employers are required to engage in a similar ‘interactive process’ with employees who have sincere religious objections to vaccination and provide an accommodation that allows the employee to return to work where doing so does not present an undue hardship.

 

Vaccination Incentives

An employer may lawfully provide an incentive to its employees to obtain COVID-19 vaccination outside the workplace so long as the incentive is not so substantial as to be coercive. Unfortunately, the EEOC did not give any examples of what incentives would be considered ‘so substantial as to be coercive’ and also failed to clarify whether and to what extent an employer must provide a vaccine incentive to employees who are unable to obtain a vaccination due to a medical or religious-based reason.

 

Confidentiality

An employer’s request for self-disclosure of vaccination status, or for documentation or other confirmation that an employee has received a vaccination from a third party (such as a pharmacy or personal physician), is not a medical examination or a disability-related inquiry. As a result, employers may lawfully request this information without implicating the ADA or GINA.

With that said, employers should restrict access to vaccine-related information, apply safeguards similar to those applied to other types of sensitive personal information, and obtain appropriate consent from employees before disclosing vaccine-related information to third parties.

 

Legal Actions

To date, there has been one reported case dealing with mandatory vaccines in the workplace. Similar to the EEOC guidance, the case supports an employer’s right to mandate COVID vaccines.

In April, the Houston Methodist Hospital System in Texas issued a directive requiring that all employees be fully vaccinated by June 7 or they would be placed on a two-week suspension. Employees who were not vaccinated by the end of the suspension period would be terminated.

In late May 2021, more than 100 employees who were not vaccinated, and apparently did not qualify for a disability or religious exemption, filed a lawsuit against the hospital raising a number of claims, including wrongful termination. The judge dismissed the lawsuit entirely. In his written decision, the judge expressed his dismay with the plaintiffs for equating the threat of termination for refusing to get the COVID vaccination to the forced medical experimentation in concentration camps during the Holocaust, calling the comparison “reprehensible.”

Addressing an argument that the vaccine mandate was contrary to public policy, the judge wrote that the vaccine requirement “is consistent with public policy. The Supreme Court has held that (a) involuntary quarantine for contagious diseases and (b) state-imposed requirements of mandatory vaccination do not violate due process.”

 

Bottom Line

While this EEOC guidance and recent decision may seem like a big victory for mandatory COVID vaccines in the workplace, Massachusetts employers should be cautious in relying on them too heavily. The Commonwealth has its own anti-discrimination and public-policy laws, so it’s difficult to predict how this might play out in a state court or administrative proceeding.

In other words, while the decision is encouraging for Massachusetts employers who want to require vaccines, it is important to check in with experienced labor and employment counsel before implementing a mandatory vaccine program.

 

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

Employment

Breaking Down the Trickier Aspects of Massachusetts Laws

By Ludwell Chase and Amy B. Royal, Esq.

State and federal laws pertaining to minimum wage, tips, overtime, and employing minors are complicated. As a result, these are areas where mistakes are often made.

Ludwell Chase

Ludwell Chase

Amy B. Royal, Esq

Amy B. Royal, Esq

Employers, however, cannot afford these errors because the consequences of not complying with these laws can be very costly. In fact, in Massachusetts, there are mandatory treble (triple) damages for violations of wage-and-hour laws relating to minimum wage, tips, and overtime. This means that, if an employer is found in violation of state law, at a minimum, for every dollar an employer does not pay in accordance with wage-and-hour laws, that employer will have to pay three times that amount.

Under Massachusetts and federal law, employers are allowed to pay employees who receive tips an hourly wage that is lower than the minimum wage. This works by allowing employers to take a ‘tip credit’ for a certain amount in tips that the employee earns. The employee must not make less than minimum wage when their tips and hourly wage are combined. Under the federal law, the Federal Labor Standards Act, all hourly workers must be paid the federal minimum wage of $7.25. Tipped workers may be directly paid $2.13 per hour if their tips and hourly wage combined are at least equal to the minimum wage. In other words, employers can claim a ‘tip credit’ of $5.12 per hour.

The U.S. Department of Labor (DOL) recently released new proposed regulations for tipped workers that reinstate the 80/20 rule. This rule limits the amount of time tipped workers can spend performing activities that are related to tip-generating duties, while their employers can still claim the tip credit. Tipped workers must spend at least 80% of their time performing directly tip-generating activities, such as serving customers, and no more than 20% of their time performing not directly tip-generating activities, such as setting tables. This rule was previously in effect but was replaced by DOL guidance in 2018.

The 2018 guidance provided that employers could claim the tip credit if non-tipped duties were performed at the same time as tipped duties, or if the non-tipped duties were performed for a reasonable time before or after tipped duties. This new proposal returns to the 80/20 rule. In addition, the new proposal specifies that, if an employee performs non-tipped activities for 30 minutes in a row, the employer cannot pay the employee the lower tipped hourly wage for that time.

For employers with tipped workers that are subject to federal wage-and-hour law, this proposal is a good reminder that they need to pay attention to these potential changes and their effects on how they compensate employees.

 

Caution on the Menu

Massachusetts has its own complex laws relating to tips, minimum wage, and overtime. As a result, these are areas where it is easy for employers to make mistakes. Therefore, employers need to pay special attention to ensure they are complying with both state and federal laws. As of Jan. 1, 2021, the minimum wage in Massachusetts is $13.50 per hour. Massachusetts is incrementally increasing the minimum wage in order to reach a $15 minimum wage by 2023. For now, employers may pay workers who make at least $20 a month in tips a tipped hourly wage of $5.55 and take a tip credit of up to $7.95 per hour, for a combined minimum wage of $13.50.

The Massachusetts Tip Law mandates that all tips must be given to employees whose work directly generates tips, and that employers and managers may not keep any portion of their employees’ tips. The law applies to three categories of employees: waitstaff employees, service bartenders, and service employees. Waitstaff employees include waiters, waitresses, busboys, and counter staff who serve beverages or food directly to patrons or clear tables, and do not have any managerial responsibilities. Service bartenders prepare beverages to be served by another employee. Service employees include any other staff providing service directly to customers who customarily receive tips but have no managerial responsibilities. For the purposes of this law, managerial responsibilities are duties such as making or influencing employment decisions, scheduling shifts or work hours of employees, and supervising employees.

Massachusetts law allows for ‘tip-pooling’ arrangements. This means all or a portion of tips earned by waitstaff employees are pooled together and then distributed among those employees. Employers must be cautious when administering a tip pool and ensure that only waitstaff, service bartenders, and service employees are being paid from the pool. This means managers and back-of-house employees like cooks and dishwashers cannot share in tips. Even employees with limited managerial roles who also directly serve patrons are not considered waitstaff employees on days when they perform managerial duties.

When employees do not receive enough in tips to make up the difference between the tipped hourly wage and the minimum wage, employers must pay the difference. Employers are required to calculate tipped employees’ wages at the end of each shift, rather than at the end of the pay period. This requires employers to keep track of how much workers receive in tips for each shift. This may also require employers to pay their tipped employees additional amounts in order to compensate for slow shifts.

Under Massachusetts law, certain businesses, including restaurants, are exempt from paying employees overtime; however, they may not be exempt under federal law. If subject to federal law, employees working in restaurants must be paid one and one-half times the minimum wage (not one and one-half times $5.55 per hour) for all hours worked in excess of 40 hours per week.

Under the Massachusetts Tip Law, if a restaurant includes a service charge, which serves as the functional equivalent of an automatic tip or gratuity, all the proceeds from that service charge must be paid only to waitstaff employees, service employees, or bartenders as a tip. Employers may, however, charge a ‘house fee’ or an ‘administrative fee,’ which they may use or distribute at their discretion, but only if it is clearly stated to customers that the fee is not a tip, gratuity, or service charge for tipped employees. Thus, any fees not intended as gratuities and not paid solely to tipped employees should not be labeled as a service charge.

 

Food for Thought

These complexities are especially important to Massachusetts employers, given that the consequences of failing to comply with wage-and-hour laws can be costly, and the penalty is the same regardless of whether the employer violated the law willfully or by mistake.

Considering the consequences of violations, businesses with tipped employees should regularly consult with their employment counsel to review their practices and policies to ensure compliance with state and federal law.

 

Ludwell Chase and Amy B. Royal work at the Royal Law Firm LLP, a woman-owned, boutique, corporate law firm; (413) 586-2288; [email protected]

Employment

Leaving — No Doubt

Peter Rosskothen admits to not knowing there is a statistic called the ‘quit rate.’

But he could certainly relate when told that this stat — a measure of how many people in the workforce quit their jobs in a given month — is historically high (2.5% in May, down from a record 2.8% in April, according to the Bureau of Labor Statistics) and also when told the reasons why.

Rosskothen, owner and operator of the Delaney House restaurant, the Log Cabin Banquet & Meeting House, and several other businesses, told BusinessWest he cannot recall a time (and he’s been in business for nearly 40 years) when it’s been more difficult to hire, and especially retain, people, particularly in the restaurant and banquet business.

He cited a host of reasons, starting with the fact that, during the pandemic, many of the workers in that field couldn’t keep working within it because businesses had to close their doors — for a few months or, in some cases, forever. So they found something else, and now, they don’t want to go back.

Meanwhile, with everyone fighting hard for good help, many companies are paying more — enough to turn heads in many cases and prompt people to leave for what appear to be greener pastures. With that, Rosskothen related the story of how he lost one of his managers to a competitor, one that was offering considerably more than this individual was making.

Sara Pileski

Sara Pileski

“When the pandemic hit, many people had a lot of time to think — they were in quarantine, some were furloughed or laid off — and they took this time to assess what was important to them: flexibility, compensation, career advancement, and whether their own values line up with those of the company they work with.”

“I had to decide if I wanted to match, and ultimately decided that I wouldn’t,” he said, adding that he opted to hire someone at roughly the same rate he was paying and absorb the other costs attended with doing so, such as training. And everyone he knows in this sector is facing the same kinds of hard decisions — on a regular basis.

Leaving for a higher salary is just one of the reasons why the nation’s quit rate is so high, said Sara Pileski, a regional vice president for Robert Half International, a national staffing business with a local office in Springfield.

She said many individuals stayed with their jobs through the pandemic because of the security they provided at a time when unemployment was soaring. Now that the worst is over, many are looking around and, in many cases, deciding it’s time to move on — for any number of reasons, ranging from a fondness for remote work and a preference to keep toiling that way when the boss is ordering them back to the office, to a desire for a different culture.

“Some people are looking to obtain a salary boost, and others are looking for greater career-advancement opportunities,” Pileski told BusinessWest. “When the pandemic hit, many people had a lot of time to think — they were in quarantine, some were furloughed or laid off — and they took this time to assess what was important to them: flexibility, compensation, career advancement, and whether their own values line up with those of the company they work with.

“During COVID, people re-evaluated what they are looking for in their careers,” she went on. “And a lot it has to do with flexibility. People, and businesses, have learned that people can be successful working remotely, so many individuals have been looking for fully remote roles, and a big piece of that is Millennials.”

Elizabeth Wise, president of the Employers Assoc. of the NorthEast, concurred, and said members are telling her that employees are leaving their jobs for a host of reasons, ranging from retirement, or, in many cases, early retirement, to those higher salaries that are now available as companies desperate for good help ante up. Like Pileski, she said many employees used the pandemic to take stock of their situation, with a good number not only finding something, or some things, lacking, but also discovering a newfound determination not to settle for what they had.

“Members are seeing more quits, more people leaving, than they would certainly like to see,” she said. “And it comes down to employees taking a step back, looking and things, and saying, ‘I’ve enjoyed my time with this company, I’ve done this, and I like this, and all of this is great, but I don’t know where things are going to go, and I don’t know what’s going to happen. I’ve always wanted to try this new field or this new area, or making this kind of change, and now is the time to do it because there are job offers out there, and the pay I’m going to get for making the change is better than it’s ever been. So I’m going to put my toe in the water.’”

Peter Rosskothen

Peter Rosskothen

“Everyone is in the same boat — they’re fighting for people, but paying them more. And then you get into the conversation … is it worth ‘this much’ to keep this person? Before COVID, you would almost always say ‘no.’ But I don’t think you can think that way anymore.”

For this issue and its focus on employment, BusinessWest looks at why so many people are putting their toes in the water and leaving their jobs, and also at what employers are doing, or should be doing, in response to this challenging trend.

 

Resigned to the Situation

Pileski stated the obvious when she told BusinessWest that this is a candidate-driven market. How long it will stay that way is anyone’s guess, but for now, job seekers are in the proverbial driver’s seat.

That’s because there were more than 9 million job openings nationwide at the end of May, and also because, well, people are still quitting a near-record rate, creating more jobs to fill.

“The ball is in the candidate’s court,” said Pileski, adding that her company has been flooded with orders from clients looking to fill positions, and there is a dearth of candidates to fill them. And those who are looking can pick and choose and go to the highest bidder, if you will. “When we call individuals on opportunities, whether it’s contract or permanent, they have multiple offers on the table, where in the past, we may have been their only resource or their only offer. Now, they’re seeing three, four, or five offers because the ball is in their court and they have the upper hand because the talent market is so low right now.”

This environment is certainly contributing to the higher quit rate, she went on, because there are myriad places for people who aren’t entirely happy to go, and, in many cases, more attractive employment packages to be found.

“Whether people are actively looking or not … they’re definitely thinking about it,” she told BusinessWest, adding that she believes the quit rate will remain higher than normal (which is just south of 2% historically) and speculates that it might not have actually peaked yet.

These sentiments were put into perspective locally — and, more specifically, across the hospitality sector — by Rosskothen, who used some words and numbers to paint a picture about how dire the hiring scene has become.

First, some numbers. He estimates that he’ll need maybe 350 employees at his various facilities to handle the peak of the season, to arrive in just a few weeks. He’s at 270 now, and really has doubts about whether he can hit his number.

“I’ve got a little bit of forgiveness in July because it’s busy, but we’re not crazy yet,” he said. “But it’s coming — it’s coming fast.”

He further estimates that his overall payroll is running about 10% higher than last year (or the last normal year), when a 2.5% to 3% increase (reflecting raises of that amount given to most employees) would be the average.

“The biggest challenge for us in this industry is that, to attract and keep people, we’re paying a lot more money than we were two years ago — a lot more,” he said. “For example, for a line cook, I used to be able to keep them happy at the $16- to $17-an-hour rate; now, I can’t get a line cook for less than $20 or $22 an hour now, because if I don’t pay them that, they’re going to go right down the street and find a job that pays them that.

“Everyone is in the same boat — they’re fighting for people, but paying them more,” he went on. “And then you get into the conversation … is it worth ‘this much’ to keep this person? Before COVID, you would almost always say ‘no.’ But I don’t think you can think that way anymore.”

Elaborating, he said that, in this climate, retention is extremely challenging. He estimates he can only retain maybe 30% of those he hires, where historically, the number is more like 60% to 70%.

Speaking in general terms, Wise told BusinessWest this problem extends across the board, to all sectors. “It’s an equal-opportunity quit rate,” she said, adding that departures are being seen in healthcare, higher education, hospitality, and other areas of the economy.

Some of those leaving are retiring, she noted, adding that the pandemic convinced many that it was time to leave the workforce, at least on a full-time basis. For others, there might be burnout, she went on, noting that, during the pandemic, many employees actually worked longer hours and skipped vacations, while dealing with stress on a number of fronts. With something approaching ‘normal’ returning, some are seeking out opportunities to take some stress out of their lives.

Whatever the reason, people are quitting in higher numbers, and employers must respond proactively, both Wise and Pileski said. And raising wages is just part of the equation. In some cases, they may need to be more flexible when it comes to where people work and when, although Wise does not believe that’s a huge issue in the 413.

As for wages, she said they are “starting to come up in Western Massachusetts,” with the pace and rate of climb determined by how competitive things are getting in a specific sector and how desperate employers are feeling.

 

Bottom Line

Adding more perspective, Rosskothen said things are certainly desperate within his sector.

“Everyone I talk to is dealing with this right now — everyone,” he noted, adding that he has seen and heard about companies offering bonuses to start and bonuses to stay a certain number of months.

He’s opting to give the bonuses to existing employees who refer people who are eventually hired. And overall, he and his managers are working harder at recognizing and rewarding long-time employees.

“I have a really hard time giving an incentive to a new employee to start with us,” he said. “I’d rather give an incentive to an old employee for being loyal.”

That’s just one way employers are coping with a quit rate — and all that comes with it — that just won’t quit.

 

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

Franklin County

Small-city Living

Greenfield’s strides in municipal broadband

MJ Adams says Greenfield’s strides in municipal broadband will boost its potential for remote workers.

At a recent briefing about potential east-west passenger rail service through Greenfield, state Sen. Adam Hinds talked about how infrastructure investments — not just in rail, but in broadband access and other realms — feels like a “build it and they will come” moment.

“We’re keenly aware we are in a critical transition, a moment of uncertainty, and it feels like we’re at a time when people are making choices about the potential to live in a region like this, or stay in a region like this, based on infrastructure development,” Hinds said, noting that ridership trends on current north-south rail would likely shift as other types of infrastructure, especially digital, come online.

“Our answer to a major disruption in our society and our Commonwealth is a major investment to make the entire community stronger, that can allow anyone to work anywhere in the world,” he added. “We need to be getting it right as we think about recovering strongly.”

MJ Adams, Greenfield’s director of Community Development, said the city has already made strides in that all-important digital realm — strides that could help position the city as a destination for people who want to keep their jobs in larger cities, but work remotely while living in a place with rural appeal, small-city amenities, and, in their mind, better quality of life.

“We felt that, not just for residents but the business community here, we needed our own municipal broadband. We didn’t realize how important that was until everyone was on Zoom.”

She was speaking of Greenfield Community Energy and Technology (GCET), Greenfield’s municipal broadband provider, which was created several years ago to meet a growing need.

“For people who require better high-speed connection, they can actually do that here now,” Adams said. “When Greenfield started building out its broadband infrastructure, that was prompted by experiences years ago, when companies turned down locating here because the internet was not very strong.

“So the city decided not to wait anymore and made a pretty big investment on the city side, making the decision that we’re not going to wait for a Comcast to come in and provide service; we felt that, not just for residents but the business community here, we needed our own municipal broadband,” she added. “We didn’t realize how important that was until everyone was on Zoom.”

John Lunt, general manager of GCET, agreed. In a Greenfield Recorder article in December, he touted GCET’s response to the pandemic — efforts that included no-charge connections for students attending school remotely — but said the utility’s role goes far beyond that.

Danielle Letourneau calls Greenfield “a small city with big-city amenities.”

Danielle Letourneau calls Greenfield “a small city with big-city amenities.”

“Revenues tend to stay local, and municipal broadband providers have become economic-development assets to their towns,” he wrote. “Reliable service, better pricing and customer service, local development, and control of critical infrastructure — this is what a municipal provider offers.”

Danielle Letourneau, Greenfield Mayor Roxann Wedegartner’s chief of staff, told BusinessWest that the city had the foresight to establish this service well before the pandemic made it more critical. But now, it plays a role in attracting new residents and businesses that are navigating a new world when it comes to how, and where, employees want to work.

“We’ve set ourselves up well,” Letourneau said. “We are a small city with big-city amenities. But we do have a rural feel. We even have several co-working spaces; we’re recognized already for that kind of thing as a way to attract people who want to move here.”

All these amenities open the city up for new arrivals, as well as people who grew up here and want to return and raise their own families here, especially those who can take advantage of new opportunities in remote work.

“Even before COVID hit, we looked at ourselves as being a pretty attractive city,” Adams said, and building out high-speed broadband was one way to build on that. “We were seeing ourselves as well-positioned for people who wanted a small-city feel but still wanted proximity to big cities. And we were planning it before COVID arrived.”

Then the pandemic accelerated the remote-work trend, which dovetailed well with what the city was doing, she went on. “Businesses are trying to understand how to make it work, but employees are also figuring out how it works for them. Here, they have an attractive way of life as they try to work remotely, farther afield from higher-priced communities in New England.”

 

Living Room

Chris Campany, executive director of the Windham Regional Commission in Vermont, told the participants in the passenger-rail meeting that “we’re seeing an odd inversion in Southeast Vermont where people are finding employment here but, because of our extreme housing scarcity, are living in Western Mass. There’s going to be a lag in the data availability, but it’s increasingly feeling like the exurban growth in the I-91 corridor has accelerated.”

He doesn’t know if that emigration will continue, but he also doubts families who have moved to Western Mass. or Southern Vermont for work or other reasons will want to uproot again after the pandemic, so there may be some staying power to these trends.

“We were seeing ourselves as well-positioned for people who wanted a small-city feel but still wanted proximity to big cities. And we were planning it before COVID arrived.”

Indeed, the real-estate market in Western Mass. has been booming, with the latest monthly report from the Realtor Assoc. of Pioneer Valley showing sales volume up 20.7% across Hampden, Hampshire, and Franklin counties from June 2020 to June 2020, and the median price up 20.4%.

But while Franklin County’s median price is up 23%, its sales actually fell by 10%, reflecting, perhaps, the shortage of homes to meet demand, which is, obviously, hiking those prices. In fact, current inventory of homes for sale in Franklin County is down 52.9% from a year ago.

Adams said Greenfield officials recognize the need for more housing, especially market-rate housing in the downtown area, noting that upper-level residential development would create mixed-use vibrancy downtown.

Understand how critical downtown is to the city’s future, municipal officials were getting ready to update the downtown revitalization plan well before the pandemic, identifying what the strengths and challenges were in the corridor, she explained. “We want to develop in a way that’s thoughtful and local and makes sense for the business community.”

Greenfield was also among the Massachusetts communities that received local Rapid Recovery Plan funding. “That helps us identify actionable plans we can put in place fairly quickly to ramp up the business community,” Adams said. “It means taking a look at both the public and private realms and the business mix and who needs to be at the table to make a comprehensive plan to breathe life back into our downtown.”

It’s a downtown, she said, that already offered entertainment in venues like Hawks and Reed Performing Arts Center and had been talking about creating outdoor dining before the pandemic accelerated that process.

“From talking to people, the draw downtown is really experience-based now versus when we were younger, and it was a place to buy goods and services,” Letourneau said. “People come here to eat out, for world-class music venues, arts, great antique shops, stuff you can’t find anywhere else. I think it’s experiential, and it’s a good feel for downtown.”

The question now is, will the city put all those pieces together, plus the draw of well-established municipal broadband, plus possibly expanded passenger rail, and become a destination of choice for an increasingly remote workforce?

“This is our opportunity now,” Adams said. “People are reassessing where they want to be and what they want to work, and they should take a look at Greenfield.”

 

Joseph Bednar can be reached at [email protected]

Banking and Financial Services Special Coverage

Stating Its Case

Tony Liberopoulos

Tony Liberopoulos says Liberty Bank might be new to Western Mass., but its lenders are anything but.

Dave Glidden is no stranger to the Western Mass. banking community, and neither is the lending team he’s assembled to grow Liberty Bank — the Connecticut-based institution he currently serves as president and CEO — within this region. Liberty’s leaders believe those community ties — some of the Western Mass. team’s lenders have worked in this market for three decades — will prove fruitful at a time when customers are looking for experience and stability.

Liberty Bank is the oldest currently operating bank in Connecticut. But Dave Glidden prefers not to think in terms of state lines.

“We’ve been in Connecticut a long time, and very recently we’ve crossed the border into Western Mass.,” said Glidden, the bank’s president and CEO and a familiar figure to the Pioneer Valley’s banking community from his years as regional president at TD Bank.

The reasons for the northward push, he said, seemed obvious.

“When I looked at this opportunity and took the job, one of the things I talked about with the board and my teammates was that, when you think about it, there are so many similarities between Connecticut and the Greater Springfield market, economically and culturally; people work back and forth across the border.

“So, really, if you stop looking at state boundaries for a second, we really lend in that I-91 corridor, New Haven on up through Middletown, through Hartford, and now into Greater Springfield,” he went on. “There are many similarities in industries and types of businesses, and we know a lot of the borrowers, the centers of influence, the CPA firms, the legal firms … and we know many of the businesses.”

“Liberty Bank is new to Western Mass., but our team is not new to Western Mass.”

That’s because Glidden and Liberty’s Western Mass. team — Chief Credit Officer Dan Flynn; lenders Tony Liberopoulos, Jeff Sattler, Rick Rabideau, and Gene Rondeau; and Sue Fearn, who specializes in cash management — have roughly 160 years of combined experience working in banking in Western Mass.

“Liberty Bank is new to Western Mass., but our team is not new to Western Mass.,” Liberopoulos said. “We’ve got one of the most experienced teams in Western Mass., even though we’re the rookie bank in this area.”

With the ability to assemble a team with that depth of experience in the market, Glidden said, expansion into this region — lending activity began last year, and a commercial loan-production office is opening this month in East Longmeadow — just made sense.

“Obviously, this commercial loan production under Tony’s leadership is the first foray over the border,” Glidden said, “and we’re continually evaluating and looking at retail branch sites and how we’ll build out the franchise over the course of the next couple of years in support of the commercial-lending activities that really started about a year or so ago.”

With more than $7 billion in assets but strong ties to its local communities, Glidden said Liberty is the kind of stable institution that appeals to customers in Western Mass., especially at a time when mergers and acquisitions (M&A) continue to shake up the landscape.

“With everything that’s going on in all the banking markets, there’s a lot of disruption with M&A, and it’s projected there will be a lot more M&A industry-wide,” he noted. “So, as a bank with our size and history, and the teams we have, we’re in a unique position where we can kind of out-local national banks and out-national local banks and be that entity in the middle that can deliver services and make decisions in a very local fashion, but has the scale and the size to grow with borrowers, usually past where a lot of the other community banks are restricted due to their size.”

Dave Glidden with a map of Liberty’s locations

Dave Glidden with a map of Liberty’s locations, most of which are concentrated along, or not far from, the I-91 corridor.

While commercial lending is the main focus right now, Glidden said, he sees Liberty eventually expanding its presence to offer that type of appeal to retail customers as well. “When a bank gets acquired, customers often say, ‘my bank’s changing, my banking relationship is changing — maybe now is the time I should have the conversation with someone else.”

It’s a sense that was only supercharged by the pandemic, a time when online retailers thrived and changed people’s expectations about service delivery.

“We have to continue to deliver the right type of distribution system for our customers if we expect to gain market share and capture those who get disrupted due to M&A activity, or whatever other market event might happen,” Glidden told BusinessWest.

“There are great banks in Western Mass., super people, experienced bankers, but there’s going to continue to be disruption — everywhere, not just in Western Mass.,” he went on. “And we think, with our balance sheet and existing franchise and the investments we’ve been making, which have been significant over the past few years, to really up our digital offerings across the board, we’re in a great position to enter a great market that means a lot to the executive leadership here at Liberty Bank.”

 

Lending Support

Since launching activity in Greater Springfield, Liberopoulos and the rest of the lending team have assembled a broad variety of clients. “It’s across the board,” he said. “We’ll do loans up to $50 million for the right client, or even higher than that. We’re primarily looking at small to medium-sized businesses. We’ll look at investment real-estate deals, and we’ll look at any privately held business, if it’s the right size for us.”

Like the Greater Hartford market in which Liberty has recently expanded its presence, Glidden doesn’t see loans in a vacuum, but rather takes a big-picture look at how each loan-funded project or expansion impacts economic development in an entire region.

“It’s important, when you’re a community bank and you go into a market, that you have a strategy to align with and understand what’s going on in those markets. Who are the key economic-development companies, the drivers? Who are the key not-for-profits that we can align ourselves with and support? Because when we invest in the communities we do business in, it’s not only the right thing to do, it’s smart business.”

As it eyes growth across its footprint, including expansion of retail, investment, and other services in Western Mass., Liberty is making another kind of investment, Glidden said: in its digital channels.

“Banking customers’ habits are changing rapidly. They were changing rapidly before the pandemic,” he said. “But, obviously, the pandemic forced people to adopt online channels that, before, they wouldn’t have felt comfortable with, or didn’t think they needed — but it became a need during the pandemic.”

Part of the bank’s strategy for this region includes what shape the physical footprint will take to support the services Liberty wants to provide, he noted — but that strategy must roll out in tandem with the digital one.

Tony Liberopoulos (left) and Dave Glidden

Tony Liberopoulos (left) and Dave Glidden say there’s a space in Western Mass. for a bank of Liberty’s size and local focus.

“Branches are changing, and customers’ habits are changing — they’re using them less, but that doesn’t mean they’re not still important,” Glidden said, noting that part of what he called his “aspirational three-year plan” has involved bolstering digital assets, so customers can choose how to interact with the bank.

“It’s not up to us to choose how customers do business with us. It’s for them to choose, and it’s incumbent on us to make sure we have all those channels there. Branches are one of them, as are online, digital, and live chat.”

As he noted earlier, Amazon and other online entities, particularly during the pandemic, have altered people’s expectations when it comes to retail, and banks are, indeed, a retail business — so a bank’s digital channels need to live up to those heightened expectations.

The pandemic impacted Liberty’s Western Mass. plans in another way, Liberopoulos said: by giving it an opportunity to stay aggressive when not every bank did.

“It was an interesting time. We came to work every day, took our precautions, properly distanced, wore our masks,” he said, noting that clients still wanted to meet, some in person, some by phone or Zoom, whatever made them most comfortable. And those meetings were often productive.

“We were firm believers that COVID was going to end, so we’d look at their financial performance prior to COVID,” Liberopoulos said. “We knew 2020 and 2021 were going to be difficult, but if they were strong in ’17, ’18, and ’19 — and if their interim results look good in ’21 now that we’re getting past vaccinations — we were very eager to win that business.

“When some other banks were uncomfortable lending because of the numbers they saw for 2020, we were not,” he went on. “We understood it’s about the owners of the business, the history of the business, and we were all convinced, here at Liberty Bank, that we could see the light at the end of the tunnel and we would find the right clients to work with.”

Glidden said he was “never prouder to be a banker” than he was in 2020.

“I never want to go through it again, of course, but what the banking industry did with the Paycheck Protection Program and the SBA lending as part of the CARES Act, that was a huge challenge for the banking industry.”

He praised not only his own team, but his colleagues at other banks for working non-stop in those chaotic early days of PPP last spring, and kept working to get customers the help they needed.

“I could see it was a very unique, maybe the most unique, time in my career,” he said. “I really felt an obligation as a banker, that we’re the only way this money is getting out there in this once-in-a-lifetime — knock on wood — pandemic.”

 

Community Ties

Getting back to the consolidation landscape, Liberopoulos said acquisitions can often distance a bank’s philanthropic arm from the communities in which is does business, but Liberty continues to be focused on those activities.

“The bank is very sensitive to the fact that we’re seeing consolidations, so we’re seeing less money being given to non-for-profits in the community, and one of our chief slogans now is ‘be community kind.’ We want to give back to the community where we work, where we lend, and where we live. And we’ve done that already,” he said, citing donations to Ronald McDonald House, and the Boys & Girls Club as recent examples.

“It’s certainly been part of Liberty Bank’s DNA and corporate culture,” Glidden agreed, noting that the bank’s foundation, which he also serves as president and CEO, gives away around $1.5 million per year, and the bank itself contributes in the seven-figure range as well.

“And our commitments are growing,” he added. “As a community bank, you have a responsibility and obligation to give back; all of us truly believe that. That’s why we’re here. We walk the talk. We give back to our communities. It’s what community banks should do. We’re mutual, we’re private, we’re owned by our customers, so you have to give back to those communities.”

Which is even more important in an era of M&A activity.

“I just think, given the disruption and consolidation in the market, that we’re a bank that’s still local and makes decisions locally. We give back to our communities; we put our money where our mouth is.”

As one of the largest PPP lenders in Connecticut, Liberty also felt a responsibility to support community members who weren’t customers, which is why it serviced PPP loans for such individuals. In some cases, that opened the door to a new relationship opportunity.

In the end, Liberty grew during the pandemic — by about $1.2 billion during 2020, in fact. Some of that was PPP activity, Glidden noted, but about two-thirds sprung from new market share and new customers.

“We continue to feel optimistic — 196 years is pretty old, but I feel more optimistic about the next 196 years than I was pre-pandemic, and I was pretty optimistic pre-pandemic.”

Liberopoulos is optimistic, too. “We’re new to the market, but we’re not new to banking. We’ve got an experienced, well-known team, and we make local decisions with quick turnaround time. We’ll make loan decisions on the spot, in front of a client, when we meet with them. That’s the kind of bank I’m happy to say I work for.”

And it’s the sort of bank that shouldn’t be constrained by state lines, Glidden added.

“Liberty Bank is coming to Western Mass. to be a business partner with the community. We’re not coming there just to make loans and take deposits. This is the first stake in the ground, so to speak, but I think everyone will see and feel our commitment to Western Mass. as we build out our franchise there.”

 

Joseph Bednar can be reached at [email protected]