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Hitting ‘Pause’

 

 

Evan Plotkin calls it the “trickle-up effect.”

He was referring specifically to the pressures placed on the owners of multi-family dwellings and apartment complexes — and also to those landlords’ vendors — when, as a result of job losses forced by COVID-19, tenants cannot pay their rent, yet they’re protected from eviction by state and/or federal legislation.

“Multi-family property-management companies and landlords may be impacted disproportionately to the extent that there are forgiveness rules being discussed that would loosen rent-payment obligations and allow residential tenants to defer rent payments,” he said. “Clearly, unless there are provisions for the property owners to be made whole on the deferral or forgiveness of rent, it could create a variety of economic hardships to those property owners.”

But the trickle-up effect applies to virtually all types of commercial real estate and fallout from COVID-19, said Plotkin, president of Springfield-based NAI Plotkin, who tragically lost his mother to the virus earlier this month. He and other property managers who spoke with BusinessWest noted that the pandemic has forced the closure of all kinds of businesses and severely impacted the cash flow of almost all others. And this has obviously made it difficult for some to the pay the rent.

Some tenants have requested deferrals or other forms of help, but others didn’t exactly ask. They essentially just took them.

“I have some tenants, large, strong companies, that have sent letters saying they have stopped all payments to all vendors, landlords, etc. — period, without any time frame,” said Ken Vincunas, president of Development Associates, which has co-developed and now manages a number of office and retail properties in Western Mass. and Connecticut. “There was no explanation, really, just ‘we’re strong and we’ll be back, but … we’re not paying you.’”

Vincunas, who was in the process of writing e-mails to those at the top levels of those companies saying that such tactics were “un-American, like hoarding, and not the right thing to do,” said many other large companies have been far more diplomatic, with actual requests for 50% of rent payments, with offers to pay it back over the next six to 12 months.

Meanwhile, others we spoke with said they are working with tenants while also introducing, or reacquainting, them with the phrase force majeure (more on that later).

Ken Vincunas

Ken Vincunas

“There was no explanation, really, just ‘we’re strong and we’ll be back, but … we’re not paying you.”

But issues with collecting rent comprise just one of the many COVID-19-related challenges now facing commercial real-estate brokers and managers. Others include trying to do business differently, with many people working remotely; a dramatic slowing of activity within the market as companies pause to assess the damage and debate whether to move forward with planned deals; and emerging concerns that, as time goes by and companies see the advantages to having people work at home, companies may adjust their needs for space downward in the years to come, creating more problems for building owners.

“Businesses are getting a test run right now with working from home,” said Plotkin. “And if that works for them, there’s a strong possibility they might want to continue that, which would create havoc in the office-leasing market — and the office-investment market.

“Everything flows from the occupancy of your building,” he went on. “If your building becomes less occupied, it’s worth less, the market value goes down, and it triggers all kinds of things that are not necessarily good for the office-business market; that’s a clear fear that we have.”

Jack Dill, a principal with Springfield-based Colebrook Realty Services, which manages a number of properties across the region, agreed, but offered the hope that these ongoing experiments will lead some to conclude, as he has, that having people working in one place promotes collaboration.

“Work is a social enterprise — it’s about relationships, and it’s about trust,” he told BusinessWest. “It’s about the free flow of information, and that’s a lot harder when people are disbursed.”

Vacancy Signs

As he talked with BusinessWest in mid-April, Vincunas noted that he had recently sent in his application for relief from the SBA-administered Paycheck Protection Program.

The application was made to essentially cover the costs of keeping the staff at Development Associates’ small office in Greenfield — located at the Greenfield Corporate Center, which the company manages — on the payroll.

And that’s just one of a long list of COVID-19-related hardships that the company is coping with. Indeed, Vincunas noted that one staff member, concerned about the health risks associated with coming to work, abruptly retired several weeks back, prompting some shuffling of duties and leaving the company generally short-handed.

“She didn’t want to leave the house,” he noted. “And that really set us back. She retired, and that was that, leaving us to pick up the slack.”

The story is generally the same with other property managers and brokers, who are, like businesses in virtually every other sector, coping with new realities when it comes to where and how work is being conducted.

Evan Plotkin

Evan Plotkin

“Businesses are getting a test run right now with working from home. And if that works for them, there’s a strong possibility they might want to continue that, which would create havoc in the office-leasing market — and the office-investment market.”

As for business itself … on the brokerage side, things have slowed considerably, as might be expected given the vast amounts of disruption, fear, and general uncertainty caused by the pandemic.

But some deals have been completed. Vincunas said he signed on a new tenant at the beginning of the crisis, and some smaller build-out efforts — being undertaken “slowly and carefully to ensure social distancing” — are in progress.

Dill said the ‘deal flow,’ as he called it, is still moving, and his company closed on a few leases early in April. Properties are still being shown, he went on, albeit carefully, and while observing certain protocols, such as frequent use of hand sanitizer and sanitizing frequently touched surfaces.

But, like others we spoke with, he noted that, as the crisis has continued, the pace of business has slowed, and many who were in the exploratory stages of a potential move have backed off, waiting for the skies to clear.

“We’ve had some say, ‘interesting, attractive property, we’re interested, but things are so unsure, let’s let this settle down and we’ll re-engage at the other end of this.’”

Vincunas agreed. “At the beginning of this, I lost three hot deals that were going ahead, and none of them have come through,” he said, noting that one involved a building in Agawam he was going to buy and lease to an interested tenant. That interest is now gone.

“I had two other tenants who were going to lease space in a building we own already, and both of them said, ‘we have to slow down, things are changing … we don’t know,’” he went on. “Everyone has this uncertainty, and they’re thinking, ‘let’s not do anything for a while.’”

As for existing tenants, while some are experiencing something approaching business as usual — Vincunas has a kidney-dialysis venture and an ambulance company in his portfolio of tenants, and they certainly fall into that category — many have been forced to close their doors because they’re not essential, and most others are hurting to some degree.

Therefore, property owners are working with these tenants, offering some deferrals on at least a portion of their rent, Plotkin explained, noting that there is what amounts to a ‘base rent’ amount in each lease, as well as an additional amount to cover operating expenses, including security, cleaning, utilities, and others.

“The base-rent amount can be deferred, not abated, for a period of time,” he explained. “But the amount for operating expenses can’t, because we still have to keep the lights on, and we still have to pay the bills.”

Extraordinary Times

This brings us back to ‘force majeure,’ a common clause in contracts that essentially frees both parties from liability and obligation when an extraordinary event or circumstance — such as a war, riot, hurricane, or flood — prevents one or both parties from fulfilling their obligations under the contract.

A pandemic certainly fits that description because some businesses have been forced to close by state decree, and almost all others have been negatively impacted in some way. It’s the force majeure clause that no doubt prompted those letters that Vincunas described earlier.

Dill said Colebrook is working with clients on a case-by-case basis, and is working with tenants experiencing hardships. Like the others we spoke with, he referenced the trickle-up effect, or the ripple effect, that tenants not being able pay some or all of their rent will generate.

“When you go to the next circle out … if landlords have tenants who can’t operate and therefore don’t have the cash flow to pay rent and other changes, that immediately impacts landlords and their ability to meet their obligations, including debt service,” he explained.

While coping with the present, those we spoke with are also looking to the future, and they project that the pandemic will change the landscape in perhaps profound ways.

For starters, Vincunas believes that the current trend toward more purchases being made online, with items — from groceries to books to sporting goods — being delivered to the home will continue, and it will drive need for additional warehouse space.

“So many things are drop-shipped,” he explained. “The warehouse and logistics business is due for a big infusion of activity, just by the nature of a growing reluctance among people to leave the house.”

Conversely, this trend will negatively impact the retail side of the business, a trend that’s already playing out on Main Streets and in malls across the country.

But it’s the office sector that has those looking down the road most concerned. Indeed, those we spoke with said it’s possible, and perhaps likely, that companies will learn from this pandemic that there are advantages to having some people working at home and fewer people at the office. And, eventually, this will lead to downsizing and less overall demand for office space.

“The office market, and retail, are the two sectors of real estate that will be most impacted by this,” said Plotkin. “In the case of office, we were seeing some pretty good momentum right before COVID-19 — Springfield usually lags behind, but nationally, the office segment was doing very well. That has come to a complete standstill.

“And the fear amongst my colleagues is that people are starting to realize that this home-work model works for them, and will this replace the need for office space?” he went on. “It remains to be seen how this is going to play out, but that’s a real fear out there; as leases renew, those tenants might be evaluating whether they need the amount of space they occupied. They may do a home/office model that would reduce the amount of space they need.”

Those we spoke with are certainly hoping that, while businesses get this ‘test run,’ as Plotkin described it, they decide there are advantages to having co-workers in one place.

“That collaborative model is important for innovation,” said Plotkin. “Having people together in close proximity offers the sharing of ideas and collaboration in ways you can’t get with a Zoom meeting.”

Dill agreed. He said companies, and his is one of them, are experimenting with having workers dispersed and working from home, and some of the results are trickling in.

“It’s working pretty well,” he said. “But it’s not the same as having your people together, where they can meet casually, sit down in the same room, and solve a problem.”

Time and Place

Just what will come of the ongoing ‘test run’ of remote working remains to be seen.

What’s clear now, though, is that this pandemic is having a significant impact on the commercial real-estate market locally, and across the country.

The ‘trickle-up’ effect, as well as the trickle-down effect, are real, and as the crisis continues, the toll it is taking on this important sector continues to mount.

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

Coronavirus Sections Special Coverage

The New Math

Julie Quink noted that, at her accounting firm — as well as most others — it is tradition to have a large party on April 15, the tax-filing deadline, or perhaps the 16th.

Steve Erickson

Steve Erickson

Patrick Leary

Patrick Leary

Julie Quink

Julie Quink

Jim Barrett

Jim Barrett

These are celebrations of hard work well done, she told BusinessWest, adding that staff members who have been under a great deal of stress and working long hours and long weeks can take a deep breath and relax, knowing that the worst is over for another year.

This April 15, there was no party at Burkhart Pizzanelli, the firm she serves as managing partner, or at most other firms. And it’s not just because the filing deadline has been extended to July 15 by both the state and federal governments.

It’s because there is still a great deal of stress, and the long hours continue as accounting firms play a huge role in trying to help their clients get to the other side of the COVID-19 pandemic.

“On a personal level, I’ve probably never worked as hard in my entire career as I have this year,” she noted. “I’ve put in many more hours than I have other years, and I know others have as well.”

Quink was one of several area accounting-firm executives to speak with BusinessWest as part of the latest in a series of virtual roundtable discussions concerning COVID-19. Those at the ‘table’ said these are, quite obviously, different times for accountants. While some of the work hasn’t changed, like all those tax returns, some of it has, including efforts to help clients of all sizes and in virtually every sector file for disaster relief (especially through the Small Business Administration’s Paycheck Protection Program), and — now that the money has started coming in — properly manage those funds so that the loans granted are forgivable.

But the work goes well beyond helping clients fill out the necessary paperwork, said Steve Erickson, CPA, partner in charge of Whittlesey’s Holyoke office. He said clients need to carefully manage cash flow, and they also need plans for the short and long term as they address life during — and after — this pandemic, and his firm, like others, has stepped in to assist with this often-difficult work.

“The biggest concern we see is cash flow and advising clients on what’s coming down the pike and making good long-term plans for whatever they’re doing,” he told BusinessWest. “And each one of them is unique; I can’t say that there’s one that’s very similar to the other.”

Meanwhile, the manner in which work is being done is obviously changing as well. Many of those we spoke with are working at home — some or all of the time — while discussions with clients and co-workers are now done mostly by phone, e-mail, or Zoom. And since accountants are working with clients’ sensitive financial information while at home, proper protocols and security measures have been added.

There are lessons being learned. Summing up the comments offered, it seems that those in accounting work much more efficiently — and certainly communicate much better — when they’re together in the same office, sharing ideas and collaborating. As for clients … the remote meetings have worked well, for the most part, and they may be the preferred method moving forward.

“From a positive standpoint, this has shined a bit of a light on our firm as far as our processes, our policies, how we can do things better, and what we should be looking to do better, said Patrick Leary, CPA, a partner with Springfield-based MP CPAs. “Hopefully, we’re going to learn from this and everyone else will learn from this and make themselves a stronger firm.”

“The biggest concern we see is cash flow and advising clients on what’s coming down the pike and making good long-term plans for whatever they’re doing. And each one of them is unique; I can’t say that there’s one that’s very similar to the other.”

Overall, this has been, and will continue to be, an intriguing, challenging, and in most all ways rewarding time for accountants, said those at the virtual table. Clients are calling them — and leaning on them for help — like never before, and as a result, relationships are being strengthened, and new ones are being formed.

Jim Barrett, managing partner at Holyoke-based Meyers Brothers Kalicka, said that, for some time, his firm — and most all firms, for that matter — have been working to broaden the umbrella of services to clients and develop relationships that are more advisory and consultative in nature.

The pandemic has in some ways forced the issue.

“This crisis has spurred us to do more consultative and advisory work with clients, not only with navigating the stimulus package, but also navigating any changes in their business, be it with employees or costs,” Barrett explained, adding that this work is certainly ongoing and is likely to continue for some time.

Beyond the Numbers

All through her career, Quink told BusinessWest, she’s prided herself on having the answers when clients have questions.

She still has most of the answers, but COVID-19 has changed that equation as well, because now, the questions are, well, different — in many cases, much different.

“This is my 29th year doing this, and I can’t recall a time when I’ve said ‘I don’t know the answer to that’ as much as I have these past few months, and follow it up with ‘I’ll have to get back to you,’” she told BusinessWest, adding that, in many cases, the answers don’t come easily.

That’s because clients are asking about whether to furlough employees or lay them off; or about whether employees can be ordered back to work; or about how to handle a situation where a laid-off employee is making far more on unemployment than they would on the job — and, therefore, wants to stay laid off; or about what to do with employees who must stay on the payroll for the loan from the SBA to be forgivable, but have no work to do because the business can’t open yet because it’s not deemed ‘essential.’

“People who scrambled to apply for the loan as soon as they could for fear that the funds were going to run out are now starting to receive those proceeds, and they’re asking, ‘if I bring my employees back, what am I going to do with them?’” said Leary, noting that there are many types of businesses that fall into this category. “Do they paint the walls?

“If you’re a lower-wage earner, and you can make the same or more on employment, what’s the incentive to go back to work and help my employer have some of his loans forgiven?” he went on. “It’s a predicament that a lot of companies are facing, and we haven’t seen any real guidance on it.”

Coping with such questions is a new reality for accountants. Actually, it’s one of many new realities. And they all come on top of the oldest of realties — tax season.

Add it all up — pun intended — and this has been a very different start to the year for accountants. Things began as they generally do, with tax-return work starting to flow in during the winter months and building toward the annual late-March, early April crush. By mid-March, though, as the pandemic reached Western Mass., and especially after non-essential businesses were ordered closed on March 24, things changed dramatically.

Clients were suddenly thrust into a situation unlike anything they’d seen before, said Barrett, and they were calling their accountant in search of some answers and, more importantly, some guidance.

“There’s a lot of companies and medical practices who have never gone through this before, and they’re doing the appropriate thing … their financial people are going through their expenses, they’re going through what needs to be paid and what should be paid — basic business decisions that they’re trying to make under a period of duress,” said Barrett. “What we see is that either the company doesn’t have a financial person — it’s the owner asking us — or they do have a financial person, and that person is, for the most part, by themselves, and they’re looking for advice or just want to bounce their plan off someone to see that it makes sense.”

And as clients started calling with new and different needs, accountants were having to adjust to new ways to work.

Indeed, most have been working at home — another of those new realities that brings its own set of challenges — and thus communicating with clients and colleagues alike in ways other than face-to-face.

“We’ve instituted procedures and policies that we never had before because we’ve never had that many people working out of the office,” said Barrett, whose sentiments were echoed by others at the ‘table.’ “We’re still fine-tuning those moving forward, but it’s changing the way we work, without a doubt.”

Erickson agreed. He said Whittlesey closed its three offices on March 18 and went to remote access. Like everyone else who’s gone through it, he called it a learning experience.

“It was a little bumpy at first, just getting used to the whole thing and trying to stay out of the kitchen and all the snacks in there,” he noted. “But, overall, it’s gone smoothly.”

Quink noted that, while Burkhart Pizzanelli has closed its office to outside traffic, some staffers still come to the office most days, and carefully practice social distancing — while taking a number of other steps in the name of safety — while doing so.

“We’re not on top of each other; we have a nice layout so we can maintain the appropriate distance,” she explained. “At lunchtime, it might look like you’re looking at the royal family — there’s one on one end of the table and one at the other end, and we’re always going around and reminding each other about being safe and taking the steps to stay safe; we emphasize that, if one of us goes down, the entire firm is down.”

Forms and Function

But it’s the nature of the work, more than how it’s carried out, that has been the more dramatic, and impactful, change for accountants.

Much of it has involved filing for PPP relief and now helping clients carefully manage that money, but, as noted earlier, it goes well beyond that.

There are all those questions to answer, or try to answer, as the case may be, but there’s also the task of helping companies plan — something that’s very difficult to do in these times — for whatever might happen in the coming months.

“We have spent quite a bit of time with our corporate clients talking about cash-flow management and cash-flow projections,” said Leary. “We’re talking through ‘what-if’ scenarios with a range of clients that runs the gamut, from those in the cleaning-supply business who cannot get enough product in the door to those in the hospitality industry who have shuttered their doors.

“We’ve had some discussions with some distributors and manufacturers who are now being more cognizant of their suppliers and their inventory levels,” he went on, offering a specific example of the consultative work going on. “They’re looking at having redundant suppliers; instead of having just a West Coast supplier, they’re asking whether they should also have one from Canada or one in the Asia market. If borders get closed, do they have a redundant supplier, and what is the proper inventory level? There’s a lot of thoughtful planning going on.”

Erickson concurred, and noted that, while planning, clients of all sizes are grappling with the moment as well, and this means dealing with everything from cash flow to employment matters to discussions with the landlord and the bank about possible deferrals of payments.

Quink agreed and noted that, overall, there are important conversations to be had with clients. And while some of them, especially those with the cleaning companies that have more work than they can handle, are upbeat in nature, most are exactly the opposite.

“We’re having a lot of strategy conversations with clients, and the reality is that some of the clients we’re taking to … we know they’re not going to make it through this,” she said. “So we’re having the best conversations we can to position them so that when that happens — if it happens — they’re at least well-advised.”

While it’s difficult to see any silver linings to the current crisis situation, the accountants at the ‘table’ said they can find some in the way that clients are looking to learn from what’s happened and take steps to not only survive the pandemic but be a better, stronger company for the future.

“There are a lot of people proactively planning for the long term,” Leary said. “And to me, that’s positive; they’re not making impulsive decisions and thinking that this is going to close their doors permanently. It’s more, ‘when we come out of this, how do we do it better?’ And that’s encouraging.”

As for the accounting firms themselves, they’re dealing with the moment themselves, and it’s a challenging time. Most of the consulting work mentioned above is provided at the upper levels, by the partners, who, at the same time, are trying to manage younger staff members, many of them working remotely.

“We’re trying to juggle two things at once, and we’re frustrated that we can’t teach as much, and it’s difficult to manage younger people at home,” Barrett said. “Meanwhile, there’s that thought in the back of our minds … ‘boy, I hope we get paid for this.’”

Indeed, while firms are eager to help, they are advising clients knowing that the bills for their services may wind up at or near the bottom of the pile of those that get paid. Such fears are the basis for comments shared by many at the table that, while this will be a busy year, it may not be a good one when it comes to the bottom line.

This is just one of many stress-inducing matters to contend with during a year that will be unlike any other for the accounting firms in the region.

“The toll that this pandemic has taken on our team from the mental perspective is enormous,” said Quink. “It not just how it’s extended the season, but how it’s added a lot to our workloads.”

Bottom Line

Getting back to the annual April 15 celebration … Quink told BusinessWest there might be a party on July 15, when tax returns are now due. But maybe not.

Tax season will be over, but the work of helping clients navigate their way through COVID-19-generated whitewater will be ongoing.

That’s part of the new reality for accountants, and it will become the status quo for the foreseeable future. It will be a challenging time in many different respects, and one that gives new meaning to the phrase ‘taxing situation.’

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

Coronavirus Sections Special Coverage

Shaky Ground

Curtis Edgin

Curtis Edgin says the status of jobs often comes down to how far along in the pipeline they are.

Kevin Rothschild-Shea had just gotten off a conference call with employees of his company, Architecture EL in East Longmeadow — one of many he’s undertaken since his team begam working largely remotely.

“We’re doing well. We’ve jumped to working remotely and continue to function,” he said. “We’re maintaining our focus on multi-family and affordable housing, which has been strong, and we’re fortunate to have a number of projects.”

Looking 12 to 24 months out, the outlook is a bit murkier.

“We’re fortunate to have a lot of work in the pipeline, but we’re definitely seeing a reduction in new work and jobs starting out,” he told BusinessWest. “Quite a number of projects have been put on hold given the economic and COVID climate, so we’re seeing new projects hit ‘pause’ to a greater or lesser degree.

“We feel pretty comfortable with the workload right now, but when we look down the road, there are definitely concerns,” Rothschild-Shea went on. “We just want to keep everyone working and employed, keep everyone safe, and keep doing what we do.”

Curtis Edgin, president of Caolo & Bieniek Associates in Chicopee, told a similar story as he keeps in contact with his team remotely as well.

“We’re still busy — it’s not quite as efficient as working side by side and collaborating,” he said, adding quickly that his team has had no problem managing a number of projects currently in the pipeline. After that, though…

“We’re fortunate to have a lot of work in the pipeline, but we’re definitely seeing a reduction in new work and jobs starting out.”

“I think there will be a long-term impact in that people will be afraid — or forced, based on economic reasons, to slow down — until things stabilize and get back to where they need to be,” he said. “Right now, it’s hard to ask taxpayers or a corporation to spend additional money when they’re worried about other things.

“For the near term, we’re going to be busy, then we’ll probably see a slowdown,” Edgin went on. “That’s more of a long-term impact that will eventually correct itself like any other construction cycle.”

That’s the hope, anyway. Meanwhile, as definitive answers about the eventual length of the economic shutdown, and the damage it will cause, are difficult to assess right now, firms continue to plan for an uncertain future.

Moving Forward

Edgin said Caolo & Bieniek has plenty projects in various phases, and how the pandemic affects individual project can vary dramatically between jobs.

“Some projects are able to maintain their schedule,” he noted. “One of our school projects is going on, there’s a lot of site work, so nothing keeps people from working at different ends of the site. At some other projects, interior ones, [COVID-19] is starting to impact the ability to perform the work if people are working side by side. It depends on the project.”

On the municipal side, he explained, everything that needs to be voter-approved going forward — that is, when city and town halls begin ramping back up — may be a harder sell, an any tax increases during these times of sudden unemployment will be met with resistance.

“On the flip side, with the interest rates being so low, now is a wonderful time to continue,” Edgin added. “Many of these municipalities have already secured the approval of taxpayers, selectmen, or whoever makes the decision to actually move forward, and a lot of them getting really great financing rates, getting a lot of mileage out of their dollar.”

On the private commercial side, many companies and developers will wait for the dust to settle. “If they’re already committed, if we’re already moving forward, typically they keep going. If they’re just about to move on a project, maybe they have just a little hesitation.”

Kevin Rothschild-Shea

Kevin Rothschild-Shea says his firm is on solid footing in the short term, but expects work across the industry to slow somewhat after that.

In addition to its usual array of multi-family and affordable-housing projects, Architecture EL has been tackling, among other things, a Holyoke project with Local 104 Plumbers and Pipefitters and a project for Theodores’ in downtown Springfield.

“They’ve had significant slowdowns, as all restaurants have, but continue to look down the road at their overall restaurant needs, and they’re looking to keep that project on track,” Rothschild-Shea said. Meanwhile, he understands that other businesses will respond to the current economic climate by tapping the brakes and preserving cash flow.

The architecture world has responded to the COVID-19 crisis in other ways, too. For example, the American Institute of Architects (AIA) launched a task force to help inform public officials, healthcare-facility owners, and architects on adapting buildings into temporary healthcare facilities.

“On a daily basis, I am hearing from our architects who feel a deep sense of moral duty to support our healthcare providers on the front lines of this pandemic,” AIA President Jane Frederick wrote on the AIA website. “As our communities assess buildings to address growing surge capacity, we hope this task force will be a resource to ensure buildings are appropriately and safely adapted for our doctors and nurses.” 

“I think there will be a long-term impact in that people will be afraid — or forced, based on economic reasons, to slow down — until things stabilize and get back to where they need to be.”

The task force has developed a model of ‘rapid-response safety space asssessment’ for AIA members that will include considerations for the suitability of buildings, spaces, and other sites for patient care.

“This is a race against time for healthcare facilities to meet bed surge-capacity needs,” Kirsten Waltz, president of the AIA Academy of Architecture for Health and director of Facilities, Planning, and Design for Baystate Health, also noted on the website. “This task force will help inform best practices for quickly assessing building inventory and identifying locations that are most appropriate to be adapted for this crisis.”

Waiting Game

Meanwhile, life goes on for local firms like Architecture EL, even if the team can’t see each other face to face.

“We see a little loss of efficiency in terms of communicating, trying to connect with the team, but we’re doing well on that front,” Rothschild-Shea said, adding that he conducts at least three project-management conference calls a week. “I’m looking forward to the camaraderie of working together.”

He believes companies, in architecture and elsewhere, will take lessons from these many weeks of remote work, many of them positive, if only an understanding the capabilities technology-supported teams have to do things more efficiently.

“It’s a whole different way of working,” he added. “We’re already looking down the road at the so-called recovery and how we will reintegrate and get back to work. But we expect there will be some changes for the better. We’re trying to look at the positives.”

Edgin said Caolo & Bieniek, like other firms, is able to keep employees busy in the short team because of the long arc of many projects, but no one can really predict the impact of a sustained economic shutdown.

“It’s different here than in retail, where you need to have someone coming through the door purchasing something to pay the sales clerk,” he noted. “We’ve got things in the works in the near term. As for the more intermediate term and the future … we’ll see.”

Joseph Bednar can be reached at [email protected]

Coronavirus Sections Special Coverage

Neighbors Helping Neighbors

The Amherst Area Chamber of Commerce has partnered with the Amherst Business Improvement District’s launch of the Relief and Resiliency Microgrant Program to provide financial relief to Amherst-wide small businesses affected by COVID-19 closures, through the newly formed Downtown Amherst Foundation (DAF). The foundation, a 501(c)(3) nonprofit, was formed as a means to develop downtown Amherst cultural projects, such as a permanent outdoor performance space, but has shifted its focus to support Amherst economic stability during this difficult time.

Now, the Downtown Amherst Foundation is expanding its focus to all of Amherst, with the launch of the Relief and Resiliency Microgrant Program, executed and managed in partnership with the Amherst Area Chamber of Commerce. The goal is to raise $500,000, and $80,000 has been raised so far.

The negative economic impact of COVID-19 is unprecedented. In downtown Amherst alone, more than 70% of surveyed businesses said they could not survive a shutdown through May. The Downtown Amherst Foundation’s program intends to offer microgrants to small, local businesses and individual contractors to meet their short-term financial needs. The grant can cover employee wages and benefits (including benefits associated with employment, such as health insurance), accounts payable, fixed costs, inventory, rent, and utilities. The grants are available for Amherst small businesses, independent contractors, and self-employed individuals who operate brick-and-mortar businesses.

The foundation hopes to have funds in place and be open for applications on May 1, with an initial deadline of May 10. Subsequent deadlines will be announced. Individual donations are needed and will be tax-free. Checks can be sent to the Downtown Amherst Foundation, 35 South Pleasant St., Amherst, MA 01002, and gifts can also be made online at www.downtownamherstfoundation.org.

The new focus addresses the challenges and shortfalls of the federal stimulus package as a way to manage continual fiscal costs to help Amherst businesses weather the uncertainties of the pandemic and put them on sound footing. Amherst’s economy is uniquely aligned with higher education, and the shutdown and closures of the colleges and university hit the town earlier than other communities in the state.

The grant review committee includes Irvin Rhodes, organizational development consultant; Ellen Brout Lindsay, nonprofit consultant; Tony Maroulis, executive director of External Relations & University Events, UMass Amherst; Ralph Tate, investment-management specialist and treasurer of Kestrel Land Trust; and Glenn Barrett, CEO of Ortholite. These community members say they are united in their love of Amherst and have no conflicts of interest as business owners or landlords.

The initial push will be fundraising through Patronicity, an organization that partners with state agencies, foundations, private corporations, and granting organizations to offer pools of funding, often in the form of grants, to the organization’s constituent communities. Thomas Moore of TigerWeb, a digital marketing firm, donated the program’s logo design.

E-mail Claudia Pazmany, executive director of the Amherst Area Chamber of Commerce, with any inquiries at [email protected].

Coronavirus Sections Special Coverage

The New Math

By George O’Brien

Julie Quink noted that, at her accounting firm — as well as most others — it is tradition to have a large party on April 15, the tax-filing deadline, or perhaps the 16th.

These are celebrations of hard work well done, she told BusinessWest, adding that staff members who have been under a great deal of stress and working long hours and long weeks can take a deep breath and relax, knowing that the worst is over for another year.

This April 15, there was no party at Burkhart Pizzanelli, the firm she serves as managing partner, or at most other firms. And it’s not just because the filing deadline has been extended to July 15 by both the state and federal governments.

It’s because there is still a great deal of stress, and the long hours continue as accounting firms play a huge role in trying to help their clients get to the other side of the COVID-19 pandemic.

“On a personal level, I’ve probably never worked as hard in my entire career as I have this year,” she noted. “I’ve put in many more hours than I have other years, and I know others have as well.”

Quink was one of several area accounting-firm executives to speak with BusinessWest as part of the latest in a series of virtual roundtable discussions concerning COVID-19. Those at the ‘table’ said these are, quite obviously, different times for accountants. While some of the work hasn’t changed, like all those tax returns, some of it has, including efforts to help clients of all sizes and in virtually every sector file for disaster relief (especially through the Small Business Administration’s Paycheck Protection Program), and — now that the money has started coming in — properly manage those funds so that the loans granted are forgivable.

But the work goes well beyond helping clients fill out the necessary paperwork, said Steve Erickson, CPA, partner in charge of Whittlesey’s Holyoke office. He said clients need to carefully manage cash flow, and they also need plans for the short and long term as they address life during — and after — this pandemic, and his firm, like others, has stepped in to assist with this often-difficult work.

“The biggest concern we see is cash flow and advising clients on what’s coming down the pike and making good long-term plans for whatever they’re doing,” he told BusinessWest. “And each one of them is unique; I can’t say that there’s one that’s very similar to the other.”

Meanwhile, the manner in which work is being done is obviously changing as well. Many of those we spoke with are working at home — some or all of the time — while discussions with clients and co-workers are now done mostly by phone, e-mail, or Zoom. And since accountants are working with clients’ sensitive financial information while at home, proper protocols and security measures have been added.

There are lessons being learned. Summing up the comments offered, it seems that those in accounting work much more efficiently — and certainly communicate much better — when they’re together in the same office, sharing ideas and collaborating. As for clients … the remote meetings have worked well, for the most part, and they may be the preferred method moving forward.

“From a positive standpoint, this has shined a bit of a light on our firm as far as our processes, our policies, how we can do things better, and what we should be looking to do better, said Patrick Leary, CPA, a partner with Springfield-based MP CPAs. “Hopefully, we’re going to learn from this and everyone else will learn from this and make themselves a stronger firm.”

Overall, this has been, and will continue to be, an intriguing, challenging, and in most all ways rewarding time for accountants, said those at the virtual table. Clients are calling them — and leaning on them for help — like never before, and as a result, relationships are being strengthened, and new ones are being formed.

Jim Barrett, managing partner at Holyoke-based Meyers Brothers Kalicka, said that, for some time, his firm — and most all firms, for that matter — have been working to broaden the umbrella of services to clients and develop relationships that are more advisory and consultative in nature.

The pandemic has in some ways forced the issue.

“This crisis has spurred us to do more consultative and advisory work with clients, not only with navigating the stimulus package, but also navigating any changes in their business, be it with employees or costs,” Barrett explained, adding that this work is certainly ongoing and is likely to continue for some time.

Beyond the Numbers

All through her career, Quink told BusinessWest, she’s prided herself on having the answers when clients have questions.

She still has most of the answers, but COVID-19 has changed that equation as well, because now, the questions are, well, different — in many cases, much different.

“This is my 29th year doing this, and I can’t recall a time when I’ve said ‘I don’t know the answer to that’ as much as I have these past few months, and follow it up with ‘I’ll have to get back to you,’”  she told BusinessWest, adding that, in many cases, the answers don’t come easily.

That’s because clients are asking about whether to furlough employees or lay them off; or about whether employees can be ordered back to work; or about how to handle a situation where a laid-off employee is making far more on unemployment than they would on the job — and, therefore, wants to stay laid off; or about what to do with employees who must stay on the payroll for the loan from the SBA to be forgivable, but have no work to do because the business can’t open yet because it’s not deemed ‘essential.’

“People who scrambled to apply for the loan as soon as they could for fear that the funds were going to run out are now starting to receive those proceeds, and they’re asking, ‘if I bring my employees back, what am I going to do with them?’” said Leary, noting that there are many types of businesses that fall into this category. “Do they paint the walls?

“If you’re a lower-wage earner, and you can make the same or more on employment, what’s the incentive to go back to work and help my employer have some of his loans forgiven?” he went on. “It’s a predicament that a lot of companies are facing, and we haven’t seen any real guidance on it.”

Coping with such questions is a new reality for accountants. Actually, it’s one of many new realities. And they all come on top of the oldest of realties — tax season.

Add it all up — pun intended — and this has been a very different start to the year for accountants. Things began as they generally do, with tax-return work starting to flow in during the winter months and building toward the annual late-March, early April crush. By mid-March, though, as the pandemic reached Western Mass., and especially after non-essential businesses were ordered closed on March 24, things changed dramatically.

Clients were suddenly thrust into a situation unlike anything they’d seen before, said Barrett, and they were calling their accountant in search of some answers and, more importantly, some guidance.

“There’s a lot of companies and medical practices who have never gone through this before, and they’re doing the appropriate thing … their financial people are going through their expenses, they’re going through what needs to be paid and what should be paid — basic business decisions that they’re trying to make under a period of duress,” said Barrett. “What we see is that either the company doesn’t have a financial person — it’s the owner asking us — or they do have a financial person, and that person is, for the most part, by themselves, and they’re looking for advice or just want to bounce their plan off someone to see that it makes sense.”

And as clients started calling with new and different needs, accountants were having to adjust to new ways to work.

Indeed, most have been working at home — another of those new realities that brings its own set of challenges — and thus communicating with clients and colleagues alike in ways other than face-to-face.

“We’ve instituted procedures and policies that we never had before because we’ve never had that many people working out of the office,” said Barrett, whose sentiments were echoed by others at the ‘table.’ “We’re still fine-tuning those moving forward, but it’s changing the way we work, without a doubt.”

Erickson agreed. He said Whittlesey closed its three offices on March 18 and went to remote access. Like everyone else who’s gone through it, he called it a learning experience.

“It was a little bumpy at first, just getting used to the whole thing and trying to stay out of the kitchen and all the snacks in there,” he noted. “But, overall, it’s gone smoothly.”

Quink noted that, while Burkhart Pizzanelli has closed its office to outside traffic, some staffers still come to the office most days, and carefully practice social distancing — while taking a number of other steps in the name of safety — while doing so.

“We’re not on top of each other; we have a nice layout so we can maintain the appropriate distance,” she explained. “At lunchtime, it might look like you’re looking at the royal family — there’s one on one end of the table and one at the other end, and we’re always going around and reminding each other about being safe and taking the steps to stay safe; we emphasize that, if one of us goes down, the entire firm is down.”

Forms and Function

But it’s the nature of the work, more than how it’s carried out, that has been the more dramatic, and impactful, change for accountants.

Much of it has involved filing for PPP relief and now helping clients carefully manage that money, but, as noted earlier, it goes well beyond that.

There are all those questions to answer, or try to answer, as the case may be, but there’s also the task of helping companies plan — something that’s very difficult to do in these times — for whatever might happen in the coming months.

“We have spent quite a bit of time with our corporate clients talking about cash-flow management and cash-flow projections,” said Leary. “We’re talking through ‘what-if’ scenarios with a range of clients that runs the gamut, from those in the cleaning-supply business who cannot get enough product in the door to those in the hospitality industry who have shuttered their doors.

“We’ve had some discussions with some distributors and manufacturers who are now being more cognizant of their suppliers and their inventory levels,” he went on, offering a specific example of the consultative work going on. “They’re looking at having redundant suppliers; instead of having just a West Coast supplier, they’re asking whether they should also have one from Canada or one in the Asia market. If borders get closed, do they have a redundant supplier, and what is the proper inventory level? There’s a lot of thoughtful planning going on.”

Erickson concurred, and noted that, while planning, clients of all sizes are grappling with the moment as well, and this means dealing with everything from cash flow to employment matters to discussions with the landlord and the bank about possible deferrals of payments.

Quink agreed and noted that, overall, there are important conversations to be had with clients. And while some of them, especially those with the cleaning companies that have more work than they can handle, are upbeat in nature, most are exactly the opposite.

“We’re having a lot of strategy conversations with clients, and the reality is that some of the clients we’re taking to … we know they’re not going to make it through this,” she said. “So we’re having the best conversations we can to position them so that when that happens — if it happens — they’re at least well-advised.”

While it’s difficult to see any silver linings to the current crisis situation, the accountants at the ‘table’ said they can find some in the way that clients are looking to learn from what’s happened and take steps to not only survive the pandemic but be a better, stronger company for the future.

“There are a lot of people proactively planning for the long term,” Leary said. “And to me, that’s positive; they’re not making impulsive decisions and thinking that this is going to close their doors permanently. It’s more, ‘when we come out of this, how do we do it better?’ And that’s encouraging.”

As for the accounting firms themselves, they’re dealing with the moment themselves, and it’s a challenging time. Most of the consulting work mentioned above is provided at the upper levels, by the partners, who, at the same time, are trying to manage younger staff members, many of them working remotely.

“We’re trying to juggle two things at once, and we’re frustrated that we can’t teach as much, and it’s difficult to manage younger people at home,” Barrett said. “Meanwhile, there’s that thought in the back of our minds … ‘boy, I hope we get paid for this.’”

Indeed, while firms are eager to help, they are advising clients knowing that the bills for their services may wind up at or near the bottom of the pile of those that get paid. Such fears are the basis for comments shared by many at the table that, while this will be a busy year, it may not be a good one when it comes to the bottom line.

This is just one of many stress-inducing matters to contend with during a year that will be unlike any other for the accounting firms in the region.

“The toll that this pandemic has taken on our team from the mental perspective is enormous,” said Quink. “It not just how it’s extended the season, but how it’s added a lot to our workloads.”

Bottom Line

Getting back to the annual April 15 celebration … Quink told BusinessWest there might be a party on July 15, when tax returns are now due. But maybe not.

Tax season will be over, but the work of helping clients navigate their way through COVID-19-generated whitewater will be ongoing.

That’s part of the new reality for accountants, and it will become the status quo for the foreseeable future. It will be a challenging time in many different respects, and one that gives new meaning to the phrase ‘taxing situation.’ 

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

Coronavirus Sections Special Coverage

‘Eds and meds.’

That’s the phrase people use when talking about the backbone of this region’s economy. That’s short for education and medicine, and those two sectors really are the pillars when it comes to the economy in Western Mass.

There are others, to be sure — precision manufacturing, tourism and hospitality, financial services, and a huge population of nonprofit agencies. But eds and meds … those are the two areas that seemingly hold everything else up, from the service sector to the broad construction industry; from food and beverage to hospitality.

And now, these pillars of the economy are being seriously impacted by the COVID-19 pandemic. There will certainly be a trickle-down effect that will touch every sector of the economy, and it will be significant, but for these two sectors themselves, the pandemic brings them the sternest test they’ve ever faced.

Let’s start with healthcare. And the place to start there is there, with the hospitals that dominate that sector. Unable to perform elective surgeries and facing a host of new expenses because of the pandemic, these institutions, which employ tens of thousands of people between them, are facing serious cash-flow challenges.

Yes, these hospitals will receive some disaster relief from state and federal governments, and eventually, they will be able to return to something approaching normal — as in what was happening just six weeks ago — but hospitals are suffering fiscal wounds that will not heal quickly or easily.

As for the other many facets of the healthcare sector, many practices are closed or operating at far less than full capacity as the pandemic has many people reluctant to leave their homes for treatment that simply cannot be administered from six feet away.

Like businesses in other sectors, healthcare practices can apply for disaster relief, and some are receiving it, but almost every business in this sector is being negatively impacted, and some are simply in survival mode. The day will come when people will want to go back to the dentist, the optometrist, and the podiatrist, but one can only schedule so many appointments in a day.

Like other businesses, these practices are losing money they really can’t recover.

Overall, though, the ‘meds’ sector is strong, and it will eventually bounce back. And while the same is likely true for the ‘eds’ side of the equation, these are perilous times for this sector as well.

Indeed, the region’s colleges and universities are, for the most part, ghost towns at the moment. Campuses are essentially shut down, and learning is being carried out remotely. Schools that already seeing their endowments take big hits are facing huge losses as they reimburse students for room and board for this semester. And now serious question marks loom about the fall semester.

Behind closed doors, many college administrators are conceding that students may not be able to return in September, and they may not be able to come back until next spring. Meanwhile, many graduating high-school students, not to mention their parents, are wondering whether a crowded a college campus is the place to be — this fall, next spring, or in general.

This is the time of year when those seniors commit to colleges, with May 1 being a traditional deadline of sorts. Now, that deadline is being pushed back at most institutions in the hope that time will sharpen what it is, at the moment, a very fuzzy picture.

It is almost certain that, between the pandemic and the fiscal hardships it is causing to individuals and families, enrollment will be down, at a time when high-school graduating classes have been getting smaller and many colleges were already facing enrollment challenges.

Like the ‘meds’ sector, the ‘eds’ sector is strong and resilient. Many of the institutions have been around for 150 years or more, and they will survive this. But they likely won’t be the same.

And neither will the region, because these are the pillars of the Western Mass. economy, and they hold up everything else.

Coronavirus Sections Special Coverage

Dropped Shots

By George O’Brien

Ted Perez Jr. calls it a “non-winter.” And he’s seen more than a few during roughly a half-century of work at East Mountain Country Club in Westfield, where he’s now the president and head professional.

A non-winter is just what it sounds like — a winter that isn’t. And that’s what this region had in 2019-20, except for those few weeks in early December.

Thus, East Mountain, as it is whenever the weather allows, was open most days all through the first three and half months of this year, so much so that Perez said the club, built by his father in 1960, was on target for its best year in perhaps a few decades.

“Golf certainly isn’t what it was 25 years ago, and it’s been a long time since we’ve had a sustained good year,” he said, referring to a downturn that started with the Great Recession and has lingered since. “But we were on course to have as good a year as we’ve had in a very long time.”

Needless to say, the COVID-19 pandemic has certainly changed things in a hurry. All courses in the state were ordered closed in late March, as well as their 19th hole and banquet facilities. By then, pretty much every banquet and event through March, April, and May had been cancelled or postponed anyway.

All this is bad, but what makes it far worse is that Perez and other course owners and managers can’t understand the order — golf is played outdoors, and it’s relatively easy to socially distance — and they can’t plan because no one knows if or when the ban on play will be lifted.

“A golf course is almost like a public park,” said Antillio Cardaropoli, owner of Twin Hills Country Club in Longmeadow, a private club. “People can go out for a walk, and when you’re playing golf, the most people you have together is four, and they’re usually going in different directions on the course. This [ban] makes no sense to me.”

Perez agreed.

“I have 120 acres here — it’s very, very, very easy to maintain separation and keep six feet apart on the golf course,” he said. “I truly don’t understand why there’s even a discussion about it; there should be no debate about this whatsoever.”

To add insult to injury, if that’s the appropriate phrase, most other states, including neighboring Connecticut, have deemed that golf is essential. Well, they’re allowing the courses to open, let’s put it that way. And many in the Bay State are crossing over the line to play, said Cardaropoli.

“A golf course is almost like a public park. People can go out for a walk, and when you’re playing golf, the most people you have together is four, and they’re usually going in different directions on the course. This [ban] makes no sense to me.”

Overall, the pandemic has impacted every facet of the golf business, said Jesse Menachem, president of the Massachusetts Golf Assoc., adding that this is a long list. It includes greens fees and cart rentals, obviously, but also fundraising tournaments, leagues, food and beverages (a huge component of every club’s revenue stream), those banquets, retail (if people aren’t playing, they’re not buying clubs, balls, and new shoes), and more.

“Depending on how long this goes … if we cannot allow for golf operations to exist for another four, six, or eight weeks, that’s going to put courses in a very tough position,” said Menachem in early April, noting that the golf industry creates 25,000 jobs and is a $2.7 billion business. “This is prime time, not just for daily access, but for acquiring golfers and getting new members for private clubs.”

The best hope for course owners and managers is that, as the state begins to turn its economy back on — and that won’t happen before May 4 — golf courses will be on the list of businesses that can begin operating, with restrictions, to be sure. If that’s the case, courses will have lost several important weeks of on-course revenue and who knows how many weeks or months of banquet and food and beverage revenue.

“That’s certainly not ideal,” said Perez, “but we can cope with that.”

However, if courses can’t reopen on May 4 or soon thereafter, then what has been a challenging time for the golf industry will reach a new, unprecedented level of pain.

“From this point on, every week is critical to lose,” said Perez, noting that courses in this part of the country make more than 75% of their revenue between mid-April and mid-September. “This is revenue you just can’t make up.”

No Course of Action

It’s called ‘Good Friday, Bad Golf.’ It’s an annual event at East Mountain, a start-of-the-season gathering staged when most people have the day off from work and they’re eager to take the sticks out of the basement.

“It’s a huge golf outing — 140 players — and prime-rib dinner, the whole nine yards; when you add everything up, the golf, the bar, the snack bar, the dinner … it’s a huge day,” said Perez, noting that it obviously wasn’t a big day this year. “That’s gone; that’s been wiped out, and I can’t make it up.”

The question on everyone’s mind, and the question that can’t be answered, is how much more will be wiped out during the 2020 season?

Indeed, golf, like many other businesses, is in a state of limbo, or suspended animation. Courses can be maintained — that work has been deemed essential — but no one can play on them. Some still try, but such covert activities have drawn the ire of elected officials, if not the course owners themselves; Springfield Mayor Domenic Sarno’s very public threat to barricade the city’s two municipal golf courses to keep people off them made headlines across the state.

For those managing courses, they can deal with the present, and they are (more on that in a moment), but, as noted, they can’t plan for the future because they have no idea what it looks like.

Overall, it’s not a good place to be.

“You can’t give anyone any answers because no one knows what’s going to happen,” Cararopoli said. “The governor says it may be May 4. What it it isn’t? No one knows.”

Elaborating, he said the many question marks about the future are wreaking havoc on the banquet side of the ledger. “We’ve lost so many events already — weddings, bar mitzvahs, proms, showers, birthdays,” he noted. “And no one can rebook because they don’t know what’s going to transpire over the next few months.”

As for dealing with the present, club owners and managers are doing what they can to cope. Perez has filed an application for relief from the federal Paycheck Protection Program (PPP), and received initial approval. He was quick to note that this money can mostly be used for payroll, so when it comes to his myriad other expenses, he’s cutting corners in any way he can.

“I’m penny-pinching everything I can,” he noted, adding quickly that he’s not sure when he’ll be getting his PPP loan, adding to his cash-flow anxiety.

At Twin Hills, Cardaropoli has had to lay off a number of staff members — mostly on the banquet and food and beverage side of the house — and is unsure what to tell employees when it comes to if or when they might return.

As for the members … well, they are in a state of limbo as well, said Cardaropoli, adding that overall membership numbers are understandably down as some who might normally commit in the late winter or early spring — and that’s when a good number do — are waiting to see what happens before they sign on the dotted line and write a check.

“It’s made a big difference — March and April are the biggest months for having new members sign on,” he explained. “Now, because of the situation, fewer are signing on because they don’t know when they can start to play; membership is at a standstill.”

As for those who have signed up and started paying … if the season starts soon, fees may not have to be adjusted much or at all, Cardaropoli said. But if courses stay closed for several more weeks or months, that will certainly change, he went on, adding that it is unknown at this time just what services clubs will be offer to offer to members in 2020.

These scenarios are playing out at public and private courses across the state, said Menachem, adding that his organization continues to monitor the situation and diplomatically lobby the governor to let the courses open.

“We absolutely want to continue to advocate for our business and allow for access to golfers and enable these businesses to operate,” he said. “But we want to be respectful and realistic given what’s going on in this state, the country, and the world.”

Like Perez, Cardaropoli, and all other course owners and managers, Menachem sees golf as solid exercise and good release for those who are cooped up in their homes, and a business that should be open.

He said it would be easy to make adjustments that would enable people to play and stay safe. These include limiting carts to one passenger each — or eliminating them altogether and requiring people to walk; spacing out tee times to eliminate large gatherings at the first tee and reduce the number of people on the course at one time; limiting payments to contact-less options; pulling the cups out of the holes an inch or two to keep the ball from falling in; and keeping the flagsticks in the hole or eliminating them as well.

Perez agreed.

“Typically, we get eight foursomes an hour — a group goes out every seven and a half minutes,” he told BusinessWest. “Make it so you only have five tee times, one every 12 minutes, so you get a little more separation on the golf course. These are some of the things other golf courses are doing.

“I have a friend in Connecticut … this is what she’s doing. She’s gone with no carts, and she said it couldn’t have gone any smoother,” he went on, noting that more than 40 states allow golf courses to be open, with some restrictions. “And she’s getting 140 to 150 golfers a day. If I could get 100 players a day, I could weather this storm; zero a day just doesn’t work.”

Bottom Line

Indeed, it doesn’t.

That’s the reality for area course owners and managers today. They’re guardedly optimistic that things will change soon, but they simply don’t know.

Golf, the game, is hard. Golf, the business, has been just as hard for the past several years. And now, it’s become even more difficult.

Coronavirus Sections Special Coverage

Signs of the Times

By George O’Brien

Hyman G. Darling

Hyman Darling

Liz Sillin

Gina Barry

Hyman Darling says the calls started coming in several weeks ago.

At first, there were a few, and then, as the news about the COVID-19 pandemic became steadily worse and the grim reality of the situation became ever more apparent, the volume started increasing.

On the other end of the line were people looking to update a will or estate plan, or, more likely, finish the one they’d started but never finished or finally get started with one, he said, adding that there are obvious reasons why.

“Everyone knows someone who knows someone who has the virus, and they’re worried — about their parents, their brothers, their cousins … somebody,” said Darling, a partner with the Springfield-based law firm Bacon Wilson and one of the region’s pre-eminent estate-planning specialists. “And there’s more people sitting at home with less to do; they’re paying attention to this and thinking about it. The news is very distressing, and people are responding to it.”

Meanwhile, healthcare workers, and especially those on the front lines of the crisis, don’t have to watch on TV — they can see it right in from them — and, thus, they’re responsible for many of these calls to Darling and specialists like him across the area.

This phenomenon, if it can be called that, is certainly keeping area estate planners much busier than they were, providing some much-needed peace of mind to those who are watching the news and seeing the death tolls rise, and even adding some new phrases to the lexicon, like ‘driveway signing.’

That’s the phrase Liz Sillin, an estate-planning specialist with Springfield-based Bulkley Richardson, summoned as she talked about one of the more challenging aspects of this development: documents need to be signed and notarized, and at this moment (things may well change), Massachusetts does not allow electronic signatures for such documents as wills and healthcare proxies.

That’s why there really are signings in the driveway — and with all the proper precautions taken for preventing or at least minimizing the spread of the virus.

“We take as many steps as possible to keep us all away from one another and not cross-contaminate the paper,” said Sillin, who has now been part of a few of these elaborate exercises, which involve the lawyers and four participants — the party creating the document, two witnesses, and a notary. “Everyone brings their own pen, and everyone steps back while one person signs, preferably without touching the paper with his or her hand. We use lots of hand sanitizer; we use a clipboard, and we sanitize the clipboard. It’s kind of a bizarre process, but there are people for whom getting these documents done is paramount, and if remote signing isn’t legal, this is the only way we can do it.”

Mike Simolo, an estate-planning specialist with Springfield-based Robinson Donovan, who, like most all of his counterparts, has taken part in a few driveway signings himself, agreed. And, like others we spoke with, he said that, while it’s unfortunate that it took a pandemic to get people to do what they should have some time ago, he’s glad that many have been motivated to get this important work done.

“People who had been putting this off for one reason or another are suddenly deciding not to put it off anymore,” he said. “They’re calling up, hoping to get a plan a plan in place sooner, rather than later.”

With the accent on sooner.

And while their phones are ringing more often, those we spoke with noted that they are apprehensive that some, in an effort to get something done, and in a hurry, will take shortcuts, perhaps visit one of the legal websites out there, or, worse still, take the DIY route.

“This is LegalZoom’s dream situation,” said Simolo, referring to the popular website that provides legal assistance. “People are waking up, watching the news, and realizing, ‘I don’t have anything.’”

He said that, while people can certainly take that route, he projects that many who do will leave out something or make a mistake that could have serious implications later, when loved ones are left to settle an estate (more on that later).

For our upcoming issue’s focus on estate planning, BusinessWest looks at how the COVID-19 pandemic is prompting many to get important estate-planning work done, and how the legal community is responding.

Where There’s a Will…

As she talked about her greater workload and when and why it came about, Gina Barry, another partner and estate-planning specialist with Bacon Wilson, used the story of a pharmacist at one of the local hospitals — an individual with a number of the health risks that make him especially vulnerable to the virus — to touch on a number of the relevant points in this intriguing development.

“He’s working long hours in the hospital,” she said, “and he was terrified — and he probably still is — that, because of his high-risk concerns, he would be one of those who would contract the virus and not survive it.

“We started his plan a few years back,” she went on. “Recently, he e-mailed me and said, ‘I have no right to ask this, given that I delayed a bit, but can you rush?’ And I said, ‘absolutely, I can rush.’ I dropped everything and got it done.”

Continuing that story, Barry said this individual managed to get the notary from the hospital and two of his co-workers together to sign these documents, and she Zoomed in for the gathering to make sure everyone was signing in the right place.

As noted, this anecdote touches on a number of the many elements of this story, from the fear exhibited by healthcare workers to the need to move fast; from the logistics involved with getting a signing done to the technology used by lawyers to get the documents signed, sealed, and delivered.

And it’s a story that is now playing itself out countless times across the region.

Indeed, while not everyone calling to write or update a will or a related document is in healthcare — and the lawyers we spoke with said these individuals have been given first priority —  most everyone is terrified. And they’re also in a hurry.

And, for the most part, estate-planning specialists are able to accommodate them.

Simolo said a process that might normally take several weeks can be expedited and handled in perhaps a week to 10 days, with a fairly simple will being done in just a few days.

Meanwhile, many of these wills and other documents — living wills and healthcare proxies are also being sought — are being created in what would be considered non-traditional ways. Indeed, since face-to-face meetings are all but out given new social-distancing guidelines, estate-planning specialists are using the phone, Zoom, and other vehicles for communicating with clients and getting documents reviewed.

“People don’t care about coming in now,” said Darling. “They’re happy to do the telephone messaging, e-mails, Zoom … as long as it gets done, they don’t care if they meet us in person.”

Interest in getting documents written and notarized is especially acute among those in healthcare, and often it’s those individuals’ loved ones who are getting the ball rolling.

“I’ve been contacted by the husbands and wives of doctors,” Simolo said. “They’re saying, ‘let’s get this done as soon as humanly possible.”

Sillin agreed, and noted that there is interest among those old and young to have their affairs in order.

“Just today, I got a call from someone who is a doctor  — he’s very young and has a young family,” she explained. “He’s in a facility that has cases around him, and he’s like, ‘yikes, I have to do something.”

But interest is across the board, said those we spoke with, adding that some of those calling are finally getting around to having these documents written, while others are realizing that the ones they have are dated and need to be made current.

“People are at home reading about nothing but COVID-19,” said Sillin. “They begin to contemplate this aspect of life, and we’ve been getting a lot of calls from people of all ages who want to get going on some estate planning.”

Simolo agreed.

“It’s mostly been people who don’t have a plan in place or had a plan in place 25 years ago, when the kids were 3,” said Simolo. “Now, the grandkids are 3 — that kind of thing.”

But while those we spoke with are certainly pleased that their phones are ringing more — for themselves, but especially for their clients — they are concerned that many may try to do this work online or even draft something themselves.

“It’s been my experience that, nine times out of 10, something’s missing from those documents,” said Darling, adding that, in many other cases, documents are not signed properly. “You get what you pay for, and mistakes made now can be very costly later — not for the deceased, but for their loved ones; litigation is very expensive in a will contest, not to mention the emotional stress that it brings on family members.”

Barry agreed and summoned an analogy she’s used many times during her career — too many to count by her estimate — when talking about do-it-yourself wills and related documents.

“You can pull your own tooth, too,” she said. “But would you rather visit a dentist or tie a string to a doorknob and try it that way?”

Peace of Mind

Finishing her story about the pharmacist in one of the local hospitals, Barry said that, at the conclusion of the signing — which, again, she witnessed via Zoom — she asked her client if he now had some peace of mind.

“He signed, and his shoulders must have dropped like four inches visibly,” she told BusinessWest. “They were up around his ears, and he just relaxed and dropped his shoulders. And I said to myself, ‘this is why we’re doing this.’”

And doing a lot of this.

There aren’t very many bright spots to be found in the midst of this pandemic, but this is clearly one of them. People across the region are becoming proactive and getting needed documents in place.

And that’s allowing many more people to sigh, relax, and drop their shoulders.

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

Coronavirus Sections Special Coverage

Strong Medicine

As COVID-19 continues to upend nearly every aspect of life in the U.S., Congress has been working to relieve suffering Americans. Having passed the Families First Coronavirus Response Act on March 18 in an effort to limit the spread of the pandemic and support relief efforts, Congress turned to stabilizing the economy. After days of furious negotiations between Republicans and Democrats on Capitol Hill and Trump administration officials, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. With a $2.2 trillion price tag, the act is the most expensive piece of legislation ever passed.

The act passed in the Senate by a unanimous vote late on March 25 and was passed in the House of Representatives on March 27. The President signed the bill into law later that day.

The CARES Act looks to make a significant impact on the economy by providing loan forgiveness, supporting small businesses, enhancing unemployment insurance, and providing federal loans to industries severely impacted by the pandemic. In addition, it provides tax relief and tax incentives for individuals and businesses alike. The majority of the tax relief is designed to increase liquidity in the economy, largely through the relaxation of limitations on business deductions and the deferral of taxes, but also with the introduction of recovery rebates for individuals.

In this article, Meyers Brothers Kalicka, P.C., in conjunction with its affiliation with CPAmerica, presents some of the key elements of the CARES Act and how they will impact individuals and businesses.

INDIVIDUAL TAX RELIEF

Recovery Rebates

The most well-publicized provision is the $1,200 recovery rebates for individual taxpayers. The rebate amounts are advance refunds of credits against 2020 taxes, and equal to $1,200 for individuals, or $2,400 for joint filers, with a $500 credit for each child. The amount of each rebate is phased out by $5 for every $100 in excess of a threshold amount. This threshold amount is based upon 2018 adjusted gross income (unless a 2019 return has already been filed), and the phaseout begins at $75,000 for single filers, $112,500 for heads of households, and $150,000 for joint filers. Thus, the rebates are completely phased out for single filers with 2018 (or 2019, if applicable) adjusted gross income over $99,000, heads of household with $136,500 (or higher, depending upon whether status is established because of children), and joint filers with $198,000.

In order to be eligible for a recovery rebate, the individual must not be: (1) a non-resident alien, (2) able to be claimed as a dependent on another taxpayer’s return, or (3) an estate or trust, and must have included a Social Security number for both the taxpayer, the taxpayer’s spouse, and eligible children (or an adoption taxpayer identification number, where appropriate). The act includes additional rules for the application of the credit.

The Secretary of the Treasury has been directed to provide the rebate as rapidly as possible.

Retirement Plans

The CARES Act also waives the 10% penalty on early withdrawals up to $100,000 from qualified retirement plans for coronavirus-related distributions. For purposes of the penalty waiver, a coronavirus-related distribution is one made during the 2020 calendar year to an individual (or the spouse of an individual) diagnosed with COVID-19 with a CDC-approved test, or to an individual who experiences adverse financial consequences as a result of quarantine, business closure, layoff, or reduced hours due to the virus. Any income attributable to an early withdrawal is subject to tax over a three-year period, and taxpayers may recontribute the withdrawn amounts to a qualified retirement plan without regard to annual caps on contributions if made within three years.

This relief is commonly granted by Congress in the wake of major disaster declarations, such as those made after a major hurricane.

The act also waives all required minimum distributions for 2020, regardless of whether the taxpayer has been impacted by the pandemic.

Charitable Contributions

The CARES Act enhances tax incentives for making charitable contributions for the 2020 tax year. First, it allows an above-the-line deduction of up to $300 for charitable contributions made by individuals. This allows an individual to claim a deduction for a charitable contribution, even if the individual does not itemize deductions.

Additionally, the percent-of-adjusted-gross-income (AGI) limitations are increased for all taxpayers as well as for specific types of contributions. For the 2020 tax year, individuals can claim an unlimited itemized deduction for a charitable contribution, which is normally limited to 50% of AGI. In the case of corporations, the usual 10%-of-AGI limitation is increased to 25% for the 2020 tax year. Finally, the contribution of food inventory, the deduction for which is normally limited to 15% of AGI, is increased to 25% for the 2020 tax year.

Student Loans Paid by Employers

The act provides for an exclusion of up to $5,250 from income for payments of an employee’s education loans. In order for the exclusion to apply, the loan must have been incurred by the employee for the education of the employee (so, for example, the loan must not have been incurred to pay for the education of the employee’s child). The payment can be made to the employee or directly to the lender. The exclusion only applies for payments made by an employer after the date of enactment and before Jan. 1, 2021.

The $5,250 cap applies to both the new student-loan repayment benefit as well as other educational assistance (e.g., tuition, fees, books) provided by the employee.

BUSINESS TAX RELIEF

Employee Retention Credit

The CARES Act grants eligible employers a credit against employment taxes equal to 50% of qualified wages paid to employees who are not working due to the employer’s full or partial cessation of business or a significant decline in gross receipts. The credit is available to be claimed on a quarterly basis, but the amount of wages, including health benefits, for which the credit can be claimed is limited to $10,000 in aggregate per employee for all quarters. The provision contains several requirements defining qualified wages, qualified employees, and qualified employers. The credit applies to wages paid after March 12, 2020 and before Jan. 1, 2021.

This is very similar to the paid leave credits granted to employers under the Families First Coronavirus Response Act signed into law on March 18, with some changes to the requirements. Most significantly, neither the employee nor the employer have to be directly impacted by infection.

This is also similar to the employee retention credits Congress provides after major disasters, but with different requirements and limitations.

Payroll Tax Deferral

In order to free up employers’ cash flow and retain employees during times of quarantine or shutdown, the CARES Act defers the payment of payroll taxes. Payroll taxes due from the period beginning on the date the CARES Act is signed into law and ending on Dec. 31, 2020, are deferred. The 6.2% OASID portion of payroll taxes incurred by employers, and 50% of the equivalent payroll taxes incurred by self-employed persons, qualify for the deferral. Half of the deferred payroll taxes are due on Dec. 31, 2021, with the remainder due on Dec. 31, 2022.

Net Operating Losses

The act allows for a five-year carry-back of net operating losses (NOLs) arising in 2018, 2019, or 2020 by a business. Businesses will be able to amend or modify tax returns for tax years dating back to 2013 in order to take advantage of the carry-back. Under current law, only farming NOLs are allowed to be carried back, and the carry-back is limited to two years.

The Tax Cuts and Jobs Act (TCJA) eliminated the carry-back of NOLs for tax years ending after 2017 and allowed for the indefinite carry-forward for NOLs. Prior to the TCJA, an NOL could be carried back two years, with longer carry-back periods for NOLs arising from a casualty or declared disaster or farming losses.

The CARES Act also eliminates loss-limitation rules applicable to sole proprietors and pass-through entities to allow them to take advantage of the NOL carryback. Additionally, the act allows for NOLs arising before Jan. 1, 2021 to fully offset income. Under current law, NOLs are limited to 80% of taxable income.

Minimum Tax Credits

The TCJA eliminated the alternative minimum tax for corporations for tax years after 2017, but allowed corporations to claim a refundable portion of any unused minimum tax credits through 2021. The amount of the refundable credit is limited to 50% of any excess minimum tax in 2018 through 2020, before being fully refundable in 2021. The act accelerates the year for which a fully refundable credit can be claimed to 2019, and allows corporations to elect to claim the fully refundable minimum tax credits in 2018.

Business Interest Expense Limitation

The TCJA limited the amount of allowable deductions for business interest (regardless of the type of entity) for tax years beginning after 2017. The limitation is generally the amount of business interest income for the year plus 30% of the taxpayer’s adjusted taxable income for the year. The limitation does not apply to taxpayers with average annual gross receipts for the prior three year below an inflation-adjusted amount. For 2020, this amount is $26 million or less.

The act increases the limitation amount to 50% of the taxpayer’s adjusted taxable income for 2019 and 2020 (with a special allocation election required for partnerships for 2019). In calculating the limitation for 2020, the taxpayer may elect to use adjusted taxable income for 2019.

The option to use 2019 adjusted taxable income in calculating the limitation is meant to counteract the likelihood that incomes will not be higher in 2020 because of the economic environment, whereas 2019 was generally a very high revenue year for businesses.

Qualified Improvement Property

When Congress drafted the TCJA, it allowed for 100% bonus-depreciation rules to apply to all MACRS property with a recovery period of 20 years or less. Before the TCJA, qualified improvement property was depreciated as 39-year residential real property, unless it separately qualified as 15-year qualified leasehold improvement property, 15-year retail improvement property, or 15-year restaurant property. Congress eliminated the three separate categories of 15-year improvement properties with the intention of making all qualified improvement property 15-year property. However, it failed to do so, and as a result, qualified improvement property is depreciated as 39-year property and not qualified for bonus depreciation.

This is known in tax circles as the ‘retail glitch.’ A technical amendment has long been promised and had been included in early drafts of several pieces of legislation since the TCJA became law in December 2017. However, it never made it into the final version of any piece of significant legislation voted on by either chamber of Congress.

The CARES Act corrects this congressional oversight by defining qualified improvement property as 15-year property, thus allowing 100% of improvements to be deducted in the year incurred. The change is made as if included in the TCJA and, thus, is effective for property acquired and placed in service after Sept. 27, 2017.

The closures and quarantines related to the COVID-19 pandemic have been especially hard on small businesses, which include restaurants and local retail stores. This technical correction allows any expenses incurred by owners to make improvements to the physical premises related to these businesses to be accelerated into the 2017 or 2018 tax year on an amended return, or the 2019 tax year on a return due July 15, 2020.

Excise Tax Relief

The act also provides a temporary exception from alcohol excise taxes for alcohol for use in or contained in hand sanitizer produced or directed by the U.S. Food and Drug Administration related to the pandemic. The act also suspends excise taxes on aviation and kerosene used in aviation fuel. The exception and suspensions are applicable to 2020 only.

ADDITIONAL PROVISIONS

The CARES Act is a massive act, the majority of which does not have a tax impact. However, some smaller, but no less significant, provisions impacting federal tax are sprinkled outside of the tax-related division of the act. These provisions include:

• The exclusion from tax of any forgiven small-business loans, mortgage obligations, or other loan obligations forgiven by the lender during the applicable period;

• A safe harbor from the definition of a high-deductible health plan permitting telehealth services to be included, even though such services do not carry a deductible;

• The inclusion of over-the-counter menstrual products as qualified medical expenses for purposes of distributions from health savings accounts and health flexible spending arrangements;

• Pension funding relief for failures to meet contribution requirements to defined benefit plans during 2020; and

• Allowing certain charitable employers whose primary exempt purpose is providing services to mothers and children to use small employer charity pension plan rules.

Coronavirus Sections Special Coverage

A New Reality

The massive federal stimulus that took shape last week brought some clarity to how the government would address troubling impact of COVID-19 and the large-scale economic shutdown that has emerged in response to this public-health crisis. Other efforts on the state and local levels aim to help businesses and families struggling with job loss and the suspension of livelihoods. Of course, the true relief will come when this viral threat subsides and businesses ramp back up. But no one knows exactly when that will be.

The news came in quickly — and landed hard.

Last Thursday morning, the Department of Labor issued its first unemployment-claims report since much of the country began implementing, in various ways and at various speeds, some form of economic shutdown to slow the spread of coronavirus and the respiratory illness it causes, known as COVID-19.

The news was not good. The number of Americans filing for unemployment benefits skyrocketed to a record-breaking 3.28 million for the week ended March 21 — nearly doubling expectations of 1.64 million claims. The previous record was 695,000 claims filed during October 1982.

It’s a big problem — and sometimes, big problems require big solutions. Which is why lawmakers in Washington spent much of last week hammering out a $2 trillion stimulus package aimed at helping families facing sudden job loss, small-business owners trying to survive, and entire battered industries ride out what is increasingly looking like a severe disruption to America’s economic way of life.

“Business owners … will be receiving a lifeline from the federal government that is unprecedented in scope, speed, and breadth,” Scott Foster, a partner with Bulkley Richardson, said the morning after details of the stimulus became known.

Among its many provisions, the Keeping American Workers Paid and Employed Act appears to apply to every for-profit business with fewer than 500 employees, including sole proprietors, Foster noted. The act would allow these businesses to obtain a loan — at 4% interest with a 10-year repayment term — to cover payroll costs, including healthcare premiums and paid time off, rent, utilities, mortgage payments (interest, not principal), and interest on other pre-existing loans for any eight-week period falling between Feb. 15 and June 30.

“To summarize, if you are a business and are willing to keep your employees on the payroll, pay your rent or mortgage, and stay in business, the federal government is prepared to pay your rent, your utilities, and your payroll — for employees making under $100,000 annually — for eight weeks, and the payment is tax-free,” Foster said. “It sounds too good to be true, but the public policy is sound — the easiest and best way to get financial support to the most Americans is through their employers.”

Unlike most other loans, this one will be forgiven in an amount equal to the sum of payroll costs, payments of interest on any covered mortgage, payments on any covered rent obligations, and covered utility payments. And to encourage businesses to retain their employees, the amount to be forgiven would be reduced if the business reduces its workforce.

“Business owners … will be receiving a lifeline from the federal government that is unprecedented in scope, speed, and breadth.”

Families will receive a simpler but shorter-term fix — a tax rebate totaling $1,200 for most adults and $500 for each child — which will be distributed as checks in the coming weeks. Meanwhile, states will get help in the form of a $150 billion grant fund, to be distributed proportional to population size, with a minimum of $1.25 billion for states with the smallest populations.

For many of the impacted, it’s a start, at a time of unprecedented anxiety — after all, the country has never voluntarily shut down activity on a massive scale due to a health threat, or for any other reason. This issue of BusinessWest details many of the ways businesses and families are coping, and plenty of advice from local professionals on the best ways to do so. It’s a story that changes by the day, but read on for a snapshot of where we are now.

Targeted Assistance

For many, the COVID-19 threat really hit home the morning — March 23, to be exact — when Gov. Charlie Baker issued an emergency order requiring all businesses and organizations that do not provide “COVID-19 essential services” to close their physical workplaces and facilities to workers, customers, and the public at least until April 7, while continuing to operate remotely when possible.

Those ‘essential’ businesses include healthcare and public health; law enforcement, public safety, and first responders; food and agriculture; critical manufacturing; transportation; energy; water and wastewater; public works; communications and information technology; financial services; defense industry base; chemical manufacturing and hazardous materials; and news media.

Everyone else is being asked to work at home, and most area companies were already moving in that direction before Baker’s mandate. The Springfield Regional Chamber polled its members last week about how the order impacted their operations. Almost two-thirds — 62% — said their employees were already working remotely, 27% said they began remote work after March 23, and 11% said they temporarily closed all operations because they cannot work remotely.

The threat of a longer shutdown looms, and may be foreshadowed by the governor’s order last week to keep all schools and most childcare programs closed at least until May 4, while requesting that educators gear up for the long haul by developing and enhancing online-learning capabilities.

“It sounds too good to be true, but the public policy is sound — the easiest and best way to get financial support to the most Americans is through their employers.”

In the meantime, a number of relief efforts have popped up at the federal, state, and local levels. For example, the U.S. Small Business Administration (SBA) will offer low-interest federal Economic Injury Disaster Loans for working capital to Massachusetts small businesses suffering substantial economic injury as a result of COVID-19. Applicants may apply online at disasterloan.sba.gov/ela.

This week, the Baker-Polito administration also announced economic support for Massachusetts small businesses with the Small Business Recovery Loan Fund, a $10 million fund that will provide emergency capital up to $75,000 to Massachusetts-based businesses impacted by COVID-19 with under 50 full- and part-time employees, including nonprofits. The application is at empoweringsmallbusiness.org.

Meanwhile, Common Capital offers a Fast Track Loan Program to address the needs of local businesses that need quick access to capital. Applicants seeking funding from the program to help mitigate the effects of the COVID-19 pandemic can contact Kim Gaughan, loan fund manager, at (413) 233-1684 or [email protected] for more information.

The Baker-Polito administration also announced steps last week to keep vulnerable families in their homes, preserve the health and safety of low-income renters and homeowners, and prevent homelessness due to reduced or lost income. Specifically, the Department of Housing and Community Development (DHCD) will temporarily suspend terminations of federal and state rental vouchers under its purview, while MassHousing is transferring $5 million to the DHCD for a COVID-19 Rental Assistance for Families in Transition fund to assist families facing rent insecurity.

In addition, the state Division of Banks has issued new guidance to financial institutions and lenders urging them to provide relief for borrowers — several banks have already committed to do so — and will advocate for a 60-day stay on behalf of all homeowners facing imminent foreclosure on their homes. Finally, affordable-housing operators are being urged to suspend non-essential evictions for loss of income or employment circumstances resulting in a tenant’s inability to make rent.

Meanwhile, Massachusetts will delay the collection of sales tax, meals tax, and room-occupancy taxes in the restaurant and hospitality sector for up to three months, while waiving all penalties and interest. And, of course, the IRS has informed all taxpayers that this year’s filing deadline has been moved forward three months to July 15.

Nonprofits are being squeezed by the crisis as well. In response, the Community Foundation of Western Massachusetts (CFWM) established the COVID-19 Response Fund for the Pioneer Valley with a lead gift of $1 million from MassMutual and contributions from a number of area businesses. The fund will provide resources to Pioneer Valley nonprofits serving populations most impacted by the crisis, such as the elderly, those without stable housing, families needing food, and those with health vulnerabilities. To make a gift, visit communityfoundation.org/coronavirus-donations or e-mail [email protected].

Meanwhile, Berkshire United Way and Berkshire Taconic Community Foundation have established the COVID-19 Emergency Response Fund for Berkshire County to rapidly deploy resources to community-based organizations as they respond to the impact of the coronavirus in Berkshire County. Numerous corporate funders have already emerged. To donate, visit berkshireunitedway.org/donate. Nonprofits can request funds at berkshireunitedway.org.

Finally, to help individuals in need, the United Way of Pioneer Valley established the COVID-19 Recovery and Relief Fund to provide aid and resources to those affected by the current public-health emergency. Funds collected will help families and individuals impacted by the pandemic to meet their basic, childcare, housing and financial needs. Visit www.uwpv.org for more information.

Hunkering Down

Resources such as these are critical because there’s really no telling when the region and country can return to some semblance of economic normalcy. Judging by what the medical community knows about how aggressively coronavirus spreads, the health costs of emerging from this collective cocoon too soon are too great — the healthcare system would simply be overrun. That’s why ‘flattening the curve; has become the watchword of the day.

Unfortunately, many businesses feel overrun in a different way. The Springfield Regional Chamber conducted a different poll recently, asking members what level of impact they expect the COVID-19 crisis have on their business.

More than four-fifths have major concerns; 34% say the crisis may put them out of business, while 47% say it will significantly impact their financials. Another 15% say they’ll be impacted financially but expect to weather the storm, while 4% say it’s too early to know.

In many ways, it’s too early to predict many things related to COVID-19 and its impact. Meanwhile, a nation increasingly shelters in place, seeking relief and solutions where they can find them, and hoping for the best.

Joseph Bednar can be reached at [email protected]

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