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Using History as Our Guide

By Contributor March 17, 2023

It Shows That Our Pain May Be Followed by Some Gains

By Jeff Liguori

According to Google searches, the popularity of the term ‘inflation’ hit its highest peak in at least five years during the second week of August of last year.

Jeff Liguori

For the sake of comparison, the term ‘stock market’ is one of the more popular Google searches. On average, ‘stock market’ is three times more popular than ‘inflation.’ For further comparison, the search for ‘Lebron James’ is regularly much higher than ‘inflation,’ but still not quite as popular as ‘stock market’ on average. Yet, in August of last year, ‘inflation’ bested both terms, by a wide margin.

Higher consumer prices are causing anxiety. The Federal Reserve, with its dual mandate of full employment and low inflation, has been working to ease prices through higher interest rates, which led to weak performance in both stock and bond markets in 2022 — a rare phenomenon when both markets sell off in tandem.

When the Fed raises the federal funds rate, an interest rate that banks charge to one another for overnight lending, it has a ripple effect, putting upward pressure on all interest rates, from mortgages to treasury bills. In turn, all assets get ‘repriced’; stock prices adjust lower (usually) because higher rates often mean profit margins for those businesses shrink, which equates to a lower valuation for that company’s stock price. The repricing of assets has wide-ranging implications and is often disruptive to an economy.

Is the Fed acting appropriately? Wall Street, with no lack of varying opinions, either believes the Fed has overstepped by tightening too quickly and too late, or the Fed should be more aggressive in the next two sessions and then be done. Finding an economist or strategist that thinks Jerome Powell and his crew are precisely doing the right thing is nearly impossible.

Instead of opining on the Fed’s actions — I’m not an economist, more of an ‘investment historian’ — let’s put the discussion in the context of past cycles of rising inflation and what it might mean for investors.

From January 1966 to August 1969, the federal funds rate more than doubled from 4.5% to 10.25%, in what was then seen as aggressive action by the Fed to tame inflation. In August 1969, the Fed reversed course, cutting interest rates as the economy slowed and the country faced increasing job losses. To safeguard the economy, the Fed quickly went from raising to easing interest rates, moving the effective rate back to about 5% in March 1971, as unemployment started to tick up.

But the story doesn’t end there. Inflation was persistent even with a slowing economy because of a burgeoning energy crisis. Once again, the Fed moved to a tightening stance, this time increasing interest rates by more than 300% from the spring of 1971 to the summer of 1973. Interest rates skyrocketed, and stocks suffered badly, declining by more than 40% in the 14 months following the start of that new tightening cycle, before bottoming in October 1974.

Interestingly, interest rates remained historically elevated throughout the 1980s, but stocks managed to do quite well. From the low in October 1974, the S&P 500 had an impressive run until the tech meltdown in 2001, appreciating 460% into late 2000. The data is compelling.

Following the Fed pause in 1974, in 21 of the subsequent 28 years leading up to the tech bubble, stocks generated a positive annual return. The worst year was 1977, when the S&P was down 11.5%, and the best year was 1995, when the S&P 500 generated a positive 34% return. There were eight years in that three-decade stretch when stocks increased by more than 25%.

To put things in perspective: the federal funds rate increased from 2.25% to a peak of 14.3% from February 1971 to July 1974, a total increase of about 230%, a slow and steady move higher in that 40-month period. Beginning in March of last year, the Fed raised rates from a historic low of 0.08% to 4.75%. That may seem milder as the overall level of interest rates is still historically low, but consider the Fed took this action in 11 months, increasing rates by more than 5,000%.

Overall, 2022 was unprecedented, both in the dramatic measures by the Fed and the performance of financial markets. Bond and stock markets haven’t generated a negative return in the same calendar year in almost 60 years. And there has only been one other year since 1960 when bonds had a decline in value of more than 10%, in 2009; however, the stock market appreciated almost 26% that year as the country emerged from the 2008 Great Recession.

So, what if the Fed — irrespective of Wall Street opinions — is doing exactly what needs to be done? And what if the economy avoids a recession? And what if stock and bond prices have already adjusted for a recession that doesn’t materialize (or is mild)? If history is our guide, financial markets can produce healthy returns even in inflationary periods, after some initial pain.

The answer may be as simple as to ignore consensus. Be a contrarian. The pain to our portfolios over the past 18 months may be the first step to higher returns in the near future.

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

Features

Holyoke Has a History of Facing Challenge, Creating Opportunity

By George O'Brien March 2, 2023

A Portrait of Resilience

Mayor Joshua Garcia says Holyokers need to take the long view when it comes to their city and its future.

As he talked about his city and its outlook moving forward, Holyoke Mayor Joshua Garcia first turned the clock back nearly 150 years and did what amounts to a ‘what if?’ exercise.

He was referring to Holyoke’s ubiquitous canals, which were, when they were conceived, no small bit of engineering — and financial — daring.

“It was a risk,” said Garcia, the city’s first Hispanic mayor, who took office in late 2021. “When folks built the canal system … I think about what that conversation might have been like, the divide that might have been going on in this community. You had some who probably said, ‘yes, we need to be proactive and build this system,’ and others who likely said, ‘this is too much money; our taxes are going to go up if we do that, and besides, I’ll be gone in 30 years.’”

Fortunately, those in that first category prevailed, he went on, adding that the canals helped fuel decades of prosperity, jobs, and an enviable quality of life, and they put the city on the map. And as he looks ahead, Garcia believes Holyokers must have that same willingness to take reasonable risks — to be daring, if that’s the right word — and make the necessary investments to continue, and bring to a higher level, an ongoing renaissance in a city that was among the nation’s wealthiest and a model of innovation and manufacturing excellence.

“I’m trying to get people to not think short-term — the investments we make today are not just for next month or next year, but 20 to 30 years out,” he said. “We want to build a middle school, for example, something that would benefit this city for generations to come.”

Long-term thinking is one of necessary ingredients for continued progress in this city, said Garcia and many others we spoke with for this special section commemorating Holyoke’s 150th anniversary. Overall, they said many of the other needed ingredients are already in place, everything from a focus on entrepreneurship to inexpensive and reliable green energy; from a solid, diverse workforce to spaces in which new businesses can get started and eventually grow.

Jeff Hayden, currently vice president of Business and Community Services at Holyoke Community College, previously served in several economic-development posts in the city, including as director of Planning and Economic Development. Nearly a half-century ago, he worked part-time at a Dairy Mart on Dwight Street managed by his father.

He has seen a lot of change over that half-century, and, more recently, a good deal of progress as Holyoke has diversified a business community once dominated by manufacturing, especially paper and textile making.

In the ’90s, manufacturing was still a pillar of the local economy, along with healthcare — there are several facilities providing everything from acute care to behavioral-health services to care to veterans, he noted, adding that, in recent years, diversification has included more retail (the city already boasts the Holyoke Mall), cannabis businesses, and strong growth in the arts and entertainment sectors.

And this diversification has strengthened the economy and made it more resilient, he said, adding that current efforts have been focused on creating opportunities across the board — meaning both jobs and opening the door to entrepreneurship.

Holyoke’s St. Patrick’s Day Parade, this year celebrating its 70th edition, is a great tradition for the city and the many organizations, schools, and clubs that march.

“When I look at where Holyoke is today and where it’s going, it’s clear that its leaders are focused on providing economic opportunity for all, whether they be entrepreneurs who perhaps identify as Latinx or established businesses that have been here for a long time,” he said. “The hope is to help everyone grow, and grow together.”

Aaron Vega, the former state representative who is now serving as director of Planning and Economic Development, agreed.

“Like a lot of cities, we’re at a crossroads,” he said, noting that, while manufacturing has declined in recent years and decades, other sectors have emerged, such as cannabis, IT, and clean energy. One of the keys moving forward, said Vega and many others we spoke with, is that focus on entrepreneurship and helping new small businesses take root, in some cases literally.

“It’s very hard these days to start a small business, but we have a lot of supports for that, like EforAll and the chambers, and people now realize, especially here in Western Mass., that it’s the downtown businesses that create the character in a community,” he said. “So we’re really trying to focus on that; we’re really trying to empower people who live here already to open up their own business.”

Something to Celebrate

Like many others we spoke with for this special section, Garcia said the 150th anniversary is a time of reflection, an opportunity to look back at the city’s proud history and ahead to what the next chapters might be.

It’s also an opportunity to celebrate all that Holyoke is — a proud city with a rich history, rich traditions, a diverse population, a legacy of innovation, and other enviable qualities, he said, noting that perhaps the greatest of these is resilience.

Indeed, the city has always displayed the ability to withstand adversity and move on — whether it was the many challenges of becoming the nation’s first planned industrial city or reinventing itself and diversifying its economy when much of the manufacturing moved south or overseas, or, most recently, persevering through the COVID pandemic and its many side effects.

“It’s a celebration of resiliency,” he said, adding that the city will mark the occasion in a number of ways, including a gala, an ‘Eat, Drink, and Be Holyoke’ event, a time capsule that will be placed in City Hall and opened at the 200th anniversary, ‘150th’ merchandise (hats, key chains, etc.), commemorative beers made by local brewers, and much more. “It’s a celebration of everything Holyoke.”

Vega agreed, and noted that one of the driving forces behind the city’s ongoing resurgence is a focus on the arts and culture. He cited businesses such as Gateway City Arts, a live-performance venue, and organizations such as Beyond Walls, which partnered with Nueva Esperanza Inc., a community-development and social-services agency, to honor Holyoke’s designation as a Puerto Rican Cultural District, as well as the city’s rich history and diversity, with the installation of five large-scale outdoor murals.

“When you celebrate culture, people feel more connected to their community, more connected to their neighbors,” he explained. “And when you have the ability to celebrate art, it’s about bringing people into your community, with initiatives like Beyond Walls, the events at Wistariahurst, Gateway City Arts — it’s a celebration of music and arts that invites everyone to come join.”

Aaron Vega says Holyoke has many outstanding traits, especially its long history of resilience.
Staff Photo

Beyond the arts, Holyoke is seeing a surge in new businesses on High Street; a strong wave of cannabis businesses of all kinds, including large cultivation facilities; and an influx of data centers, including the Massachusetts Green High Performance Computing Center. And in many cases, the city’s ability to provide lower-cost, green energy is a big reason why many of those businesses found Holyoke.

“Anyone who is looking for cheap electricity and green energy will knock on our door — we’re the first call they’ll make,” said Jim Lavelle, general manager of Holyoke Gas & Electric (HG&E), which can trace its roots to 1902. “It’s an interesting time, to be sure, and we’re getting a lot of inquiries; people like the story of the low-carbon, cheap electricity.”

Interest is across the board, he said, adding that it comes from data centers and cannabis cultivators (both huge consumers of electricity), but also from business owners who want to minimize their carbon footprint, he said, adding that HG&E is working with city officials to help make the most of this asset and many others the city can boast.

Another asset is Holyoke Community College, said Hayden, adding that, historically, significant numbers of city residents have been unable to take full advantage of the employment opportunities in the city because they were qualified for those jobs.

The college has long worked to change that equation through programs that will ready individuals for jobs, be they as nurses, medical assistants, chefs, or, most recently, workers in the cannabis industry. HCC also has a strong track record of students transferring students to four-year institutions.

“I like to say that we help people get a job, get a better job, or help them do their job better,” he said.

Traditions Old and New

Getting back to those planned celebrations … the 150th will be just one of a growing number of events in Holyoke this year, said the mayor, noting everything from the famous St. Patrick’s Day Parade later this month to the Fiestas Patronales, which debuted last August — a four-day celebration of the city and region’s Puerto Rican culture and heritage and billed as the largest Latino event in Western Mass.

Jeff Hayden says Holyoke has diversified its business community, strengthening it in the process.

These celebrations, old and new, capture the city’s past, present, and future, he said, adding that they reflect the city, its history, and especially its people.

That’s especially true of the St. Patrick’s Day Parade, which this year will mark its 70th edition, said Karen Casey, president of this year’s event. The 69th parade was three years in the making because of COVID, she said, a tiring, very frustrating experience on many levels.

What the pandemic years did was make those in Holyoke and beyond — this is, after all, a regional event — appreciate the tradition even more, if that’s possible.

“After having gone through what we all went through a few years ago, you saw just how much this meant to everyone,” she explained, referring to everyone from parade committee members to those who watch each year along the parade route. “Everyone just has a greater appreciation for how important this is.

“This is the third-oldest parade in the country, and we work very hard to maintain high standards,” she went on. “Anyone from around Holyoke is very proud of it; they brag about it … it’s a great tradition.”

While the buildup to the St. Patrick’s Day Parade continues, so too does planning for the 150th anniversary, said the mayor, adding that one of the intriguing tasks — and big challenges — ahead is deciding what should go in the time capsule.

Organizers are already thinking about items like one of the Super Bowl programs created by Hazen Paper, a Holyoke High School yearbook, T-shirts, a history of the city, and much more. It may take the shape of a volleyball with a large box inside.

The task of deciding what goes in the limited space in the time capsule is made more complicated by the many aspects of the city’s history and the many objects — recent and more than a century old — needed to tell the story. In many ways, it’s a good problem to have.

But getting back to that matter of resiliency, Vega said that trait is at the heart of the 150th celebration. And it is one shared by the community and the people who have lived here over the past few centuries.

“People talk about Boston Strong in the wake of the marathon bombing, but there’s also Holyoke Strong; it’s about resiliency, and it’s about history,” he said. “People have always come to Holyoke who have been migrants and have had nothing — and they built a life here. That’s what we need to keep remembering. This has always been a place where people come, get that grit, and find a path.

“This is what we’re celebrating as the city turns 150,” he went on, adding, again, that there is so much to celebrate.

Features

Holyoke’s History Is One of Adaptation, Evolution, and Water

By Joseph Bednar March 2, 2023

Going with the Flow

By Joseph Bednar

[email protected] BusinessWest.com

Old Holyoke Dam

The city of Holyoke’s website details a series of telegrams sent by one James Mills on Nov. 6, 1848 to a group of industrialists in Boston who had invested in the first dam at South Hadley Falls and were eager to hear of its performance.

“The gates were closed and the water filling behind the dam,” Mills reported at 10 a.m. It would be his only happy missive.

Noon: “Dam leaking badly.”

1 p.m.: “Leaks cannot be stopped.”

2 p.m.: “Bulkheads are giving way.”

3:20 p.m.: “Dam gone to hell by way of Willimansett.”

So, it wasn’t the most auspicious way to begin Holyoke’s new direction as a planned industrial city that harnessed the power of the Connecticut River.

But the builders learned from their mistakes — and built a replacement dam. Like the first, it was also made of wood and completed the following summer. This dam still stands, 150 feet underwater, behind the current, modern stone dam that was put into service in 1900.

This bit of history is just one example of Holyoke not only overcoming challenges, but evolving with them along a winding, intriguing, still-evolving story.

The story actually begins much earlier, with the Indigenous tribes who settled there on the rich, alluvial plain, including the Nonotucks, from whom early European settlers eventually purchased the land that would be incorporated into the future boundaries of Holyoke.

Captain Elizur Holyoke is believed to be the first European to explore the future city. In 1633, he led an expedition up the Connecticut River to explore the potential for settlement. Two years later, based upon his report, European agriculture settlement began in the region. Initially concentrated in Springfield, settlers soon began to migrate to the surrounding areas that would later become West Springfield, Chicopee, and Holyoke. Holyoke was then known as Ireland Parish, a name that would remain in common use until 1850.

When Boston investors saw in the parish industrial potential similar to Lawrence and Lowell — and the energy potential of the river — they set out to create an industrial city on a large scale.

In 1847, taking advantage of the broad plain and the 57-foot drop in the Connecticut River at South Hadley Falls, work began on the planned industrial city. Canals, mills, boarding houses, offices, and a dam were all built by pick and shovel. And on March 4, 1850, Holyoke — with its working dam — was finally separated from West Springfield and designated its own town.

“There was some resistance from the farmers who initially didn’t want to sell their land,” said Penni Martorell, Holyoke’s city historian and curator of Wistariahurst. “But eventually [the investors] won out. They just bought the land and then laid out the plan for the city. The flats area was definitely the working man’s area. The middle area around the canals was where the factories were built, and then the highlands were set aside for retail businesses and homes of the wealthier families.”

Strength in Paper

Before the planned-city idea got rolling, Holyoke was mainly an agricultural community with a sprinkling of industry, including a lumber mill on the river.

“The investors had had success in Lawrence, in getting mills set up along the river up there. And then they were like, ‘well, where else can we go?’” Martorell told BusinessWest. “Lawrence and Lowell often lay claim to being the first planned industrial cities. We say they worked it out there, and then they perfected it here in Holyoke. They really took advantage of the 60-foot drop in the river, how to harness that energy and then send it through the canals.”

Holyoke’s development was rapid, with its population surging from about 3,200 in 1850 to 45,000 by the turn of the century and more than 60,000 at its peak in the early 1920s. Textiles were the first major product of the city, quickly followed by paper, which became the dominant force in the city. At one time, more than 25 paper mills were in operation.

By 1885, 12 years after its official designation as a city, Holyoke was the largest single producer of paper of any city in the U.S., producing around 190 tons per day, more than double the next-largest producer, Philadelphia, which produced 69 tons per day despite having a population nearly 40 times its size. By 1900, Holyoke would produce about 320 tons per day, predominantly writing paper, led by American Pad & Paper Co., American Writing Paper Co., and others.

Holyoke also built schools, churches, parks, and many public buildings, including the historic City Hall (see story on page 28). By the turn of the century, Holyoke exerted considerable influence on American life. The Holyoke Opera House was the test location for Broadway plays before moving on to New York. The Easter parade here drew as many spectators as on Fifth Avenue.

A number of industrial inventions arose out of the city in the late 19th and early 20th centuries. The first and most prominent hydraulic testing lab in the U.S., Holyoke Testing Flume, performed 3,176 tests to establish turbine efficiency from 1870 to 1932. Other pioneering developments included the first use of Hans Goldschmidt’s exothermic welding process in the Americas in 1904, by George Pellissier and the Holyoke Street Railway. In electronics, the world’s first commercial toll line, between the city’s Hotel Jess and a location in Springfield, entered service in 1878. Holyoke was also home to Thaddeus Cahill’s New England Electric Music Co., which, in 1906, demonstrated the telharmonium, the world’s first electromechanical instrument, a predecessor of the synthesizer.

Meanwhile, the availability of water power enabled Holyoke to support its own electric utility company and maintain it independently of America’s major regional utilities. The city was thus a rare unaffected area in the Northeast blackout of 1965.

But the city’s second century has been a complicated story, Martorell said.

“It was boom and bust. So every time there was a bust, the wealthier people were able to prepare for that. But the lower-income people were not able to prepare. They would move on to wherever there was work. So it was a bit of transience at certain points. The paper industry kind of morphed into other industrial spaces.”

Northern Migration

Beginning at the end of World War II, the city’s demographics began to change, as an influx of Puerto Ricans and other Latino groups began to migrate to the Northeast U.S., driven largely by the Farm Labor Program initiated by the U.S. Department of Labor, which recruited Puerto Rican laborers to work on agricultural land; in the case of Holyoke, many worked on tobacco farms and arrived in the city in search of better job opportunities at the mills, as previous generations had.

“In Springfield and Holyoke, housing was inexpensive, you had access to 91 and 95, and a lot of them had an agricultural background and were looking for farm work,” Martorell said of the Puerto Rican influx. “So between Hatfield and the tobacco fields along the Connecticut River, they were able to find work pretty quickly once they got here.”

By 1970, the number of Puerto Rican residents numbered around 5,000; however, by that time, many faced a city economy that was struggling. Holyoke’s mills had closed due to the changing economic landscape of early globalization and deindustrialization; from 1955 to 1970, half of all industrial jobs vanished. Despite economic and social difficulties, however, the population grew significantly, and today Latinos form the city’s largest minority group, with the largest Puerto Rican population per capita of any American city outside Puerto Rico proper, at 44.7%.

As for those old industrial buildings, their use is evolving.

“The Skinners, who made silk, sold their company to Indian Head Mills, which was a conglomerate going around buying up textile mills in the late 1950s or early 1960s. They bought the company and then shut it down a few years later,” Martorell said. “And many of the other paper companies had already gone out. Parsons Paper was the first paper company in Holyoke, and they closed their doors in 2005. So that was a pretty good run.”

A few specialty paper and printing companies remain, but today, many of the old mills along the canals are being repurposed, from cannabis cultivation, manufacturing, and retail operations to the entertainment venue known as Gateway City Arts.

Martorell said change has been a constant in Holyoke, but so has a feeling of promise.

“People in Holyoke love Holyoke. People are committed to being here, and they want to see good things happen for the city,” she told BusinessWest. “And I think the last two mayors have really tried to make an effort to rebrand the city in a more positive way and say that the challenges that we’ve had in the past have made us stronger and more diverse. So we embrace that and celebrate that.”

Some information for this article was adapted from the city of Holyoke’s written history and from Wikipedia.

Company Milestones

Country Bank Celebrates 170 Years

By Contributor September 1, 2020

Company Milestones

Paul Scully, president of Country Bank

It was March 1850. Millard Fillmore was still working through his first 100 days in office as the thirteenth President of the United States — although no one was probably counting the days back then. In six months, California joined the Union as its 31st state, taking the country from coast to coast and Ware Savings Bank was incorporated under the laws of the Commonwealth of Massachusetts. Thus, the first chapter in the 170-year history of Country Bank was written.

There have been a number of important chapters written since — including the incorporation of Palmer Savings Bank in 1870 and the merger of those two institutions in 1981 to form Country Bank for Savings (later shortened to simply Country Bank). Paul Scully, the bank’s current president, noted that many things have changed at this institution over those 170 years, everything from its footprint — it now stretches from Ludlow to Worcester, with 14 branches and 23 ATM/ITM locations — to how people do their banking.

Company:
Country Bank
www.countrybank.com
800-322-8233
Home Base:
Ware, Mass.
Founded:
1850
President:
Paul Scully
Company Snapshot:
A community bank with 14 locations

What’s more significant to him — and all members of the Country Bank team — is what hasn’t changed in that time. Specifically, it’s a commitment to the customers, communities, and staff that sets this institution apart. In short, what hasn’t changed is that this is still a community bank in every sense of that phrase. “What we are celebrating is the bank’s support for those who have been right there with us along the way,” stated Scully. “And we’re celebrating our independence in being a mutual savings bank, and one of the most highly capitalized banks in the Commonwealth.”

This rich history of support prompted the bank to assume a leadership role during times of crisis — and there have been many over the past 170 years, perhaps none more significant than the COVID-19 pandemic.

Over the past several months, the bank has stepped up to assist its commercial and consumer customers impacted by the virus and resulting economic downturn. “Every customer matters, regardless of their deposit balance, and we’re here to help them achieve their dreams or navigate through rough waters.” None have been rougher than those generated by the pandemic, he noted, adding that the bank has written 475 Payment Protection Plan (PPP) loans in amounts ranging from $1,500 to $2 million and helped many commercial and mortgage borrowers. “It’s the premise of why community banking and Country Bank exist,” he went on. “Since the start of the pandemic, the bank has donated over $450,000 to COVID-related relief efforts along with an additional $400,000 to other local non-profits. For the past one hundred and seventy years, the bank’s operated with the belief that healthy communities thrive; recognizing that it has not only an opportunity but a responsibility to support its communities at varying levels.”

A RICH HISTORY

There have been many milestones for Country Bank since 1850, and dates to remember:

• July 1869: The Committee of Investment voted that the bank loan to the town of Ware in the amount of $70,000 was to be used in the building of the Ware River Railroad;

• 1920: The service of school savings accounts was inaugurated to help establish a habit of thrift among young savers;

• 1945: The first home loan to a veteran of World War II was made under the G.I. Bill of Rights;

• 1982: The first ATM was installed;

• 2017: The Boston Business Journal first recognized the bank for its charitable donations; and

• 2019: Country Bank became a founding member of the Worcester WooSox.

These milestones collectively speak to the notion of what a community bank is — or should be — and that legacy is being celebrated as this institution turns 170. “Behind the individual milestones is a consistent pattern of service to the community,” Scully said.

A LEGACY OF CARING

When asked how the bank would mark its 170th birthday, Scully said there would be “subtle” celebrations. “We’re not big on tooting our own horn on things,” he noted, adding that there would be themed events in the fall celebrating its 170th birthday and the staff and customers who have been a part of the bank’s legacy. Rather than celebrate with lots of hoopla, the bank is far more focused on continuing — and building upon — its strong track record. “It’s a significant milestone that you can’t take lightly,” he said. “For all of us who are associated with the organization, we are given the challenge — and opportunity — to maintain a legacy: a legacy of supporting those in need and helping customers achieve their financial goals and dreams, whatever they may be. And that’s what is being celebrated as this institution turns 170.”

MGM Springfield

Springfield Begins a New and Intriguing Chapter in its History

By George O'Brien August 20, 2018

The Moment Is Here

Few in attendance at the groundbreaking ceremonies three and half years ago could have imagined how Springfield’s South End would be transformed by MGM Springfield.

Back about 1,300 days or so ago, several hundred business and civic leaders and other dignitaries gathered in bright sunshine in Springfield’s South End to witness the official ground-breaking ceremonies for MGM Springfield.

Analysis

Those in attendance that day would probably struggle now to remember what that area looked like back then. Maybe not. The former Zanetti School and the old correctional facility (known as the ‘alcohol jail’ to many) on Howard Street were considerable landmarks, and it’s not difficult to conjure up remembrances of them and other structures now gone.

More to the point, it was virtually impossible for anyone there that day to stretch their imagination and conceive of the complex that occupies that site now. We had all seen the renderings, but back on that warm spring day, those architect’s drawings were a long, long way from reality.

Indeed, even though the journey began well before that day, those groundbreaking ceremonies marked the official moment, for most of us, anyway, when the $960 million MGM Springfield project became real. And even then, it didn’t actually seem real.

This was (and is) Springfield after all, and in the minds of many, something this big, something this grand, something this potentially life-altering, just wasn’t going to happen here. MGM was going to change its mind. The Legislature was going to screw things up. Something bad was going to happen.

The city hasn’t really seen anything like this probably since George Washington picked that acreage on the hill above downtown as the site of the young nation’s first arsenal — what became the Springfield Armory.

But here we are, 1,300 or so days later. It is real, and is happening, even if for some it seems surreal.

That phrase ‘history-making’ is overused these days, to the point where it doesn’t mean much anymore. The talking heads at ESPN use it almost every night to refer to some relief pitcher, hockey goalie, or field goal kicker achieving some obscure statistical milestone.

But with MGM Springfield, it fits. The city hasn’t really seen anything like this probably since George Washington picked that acreage on the hill above downtown as the site of the young nation’s first arsenal — what became the Springfield Armory. The armory, as most know, changed the course of this city and this region in all kinds of ways.

The innovation and craftsmanship that marked the Armory’s early days — and all its days, for that matter — sparked waves of related businesses and an entire business sector — precision manufacturing. Meanwhile, the solid jobs available at the Armory spurred wealth and the construction of the large, beautiful homes that gave the city its nickname.

What kind of chapter in the city’s history will MGM author?

We really don’t know. No one does.

Back 30 years or so ago, the good people of Atlantic City hailed the gambling palaces being built there then as a renaissance, a rebirth for a city that had fallen on some very hard times. We all know how that turned out.

MGM Springfield is opening at a time when competition for the gambling dollar has never been stiffer, and the pace of competition will only accelerate as states and regions look to cash in on what appears to be a sure thing.

Only … there is no such thing, as anyone who gambles can surely tell you.

And while MGM Springfield is many things to many people, it is, overall, a gamble, and people shouldn’t ever forget that. And when you gamble, you can win, you can lose, and you can break even.

A lot can happen over the next few years or the next few decades, but we choose to believe that the city and this region will see this gamble pay off.

And while MGM Springfield is many things to many people, it is, overall, a gamble, and people shouldn’t ever forget that. And when you gamble, you can win, you can lose, and you can break even.

It will pay off in jobs, in vibrancy, in a trickle-down effect to other businesses in many sectors, and above all, in making this city relevant again, something it really hasn’t been for a long time. Remember, before that ground-breaking ceremony, there hadn’t been a significant private-sector development in downtown Springfield in almost 30 years.

Not every development will be positive; some businesses will definitely be hurt by the arrival of MGM, and there will be more traffic and hassles getting in and out of the city. And there is the very real possibility that many of those coming to visit MGM will get back in their cars, buses, and limos at the end of the stay and get right back on I-91 north or south and leave Springfield behind.

But for city leaders, the state, the Gaming Commission, this region as a whole, and especially MGM, this was a gamble well worth taking. In the end, we don’t believe anyone will regret putting their chips on Springfield and letting it ride.

Those are the kinds of words that can certainly come back to haunt someone, but we don’t believe they will. This is, as they say in this business, a solid bet — for MGM and this region.

BusinessWest invited area business and civic leaders to offer their thoughts on what the arrival of MGM Springfield means for this region. Maybe Peter Rosskothen, owner of the Log Cabin and a host of other businesses, all of them to compete with MGM in one way or another, said it best: “I am excited about the excitement.”

So are we.

George O’Brien is the editor of BusinessWest.

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