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Chris Geehern says that even minor surges in fuel and electricity costs are cause for concern among the regions manufacturers.
So when the talk about the upcoming winter includes speculation about 30% or 40% increases in electricity costs and the possibility if not the likelihood of rolling blackouts, then those in this sector have good reason to be alarmed.
Manufacturers are large consumers of electricity, said Geehern, vice president of the Associated Industries of Mass.
(A.I.M.) So as we head into what could be a long, cold winter, there is a lot of concern in that sector.
How that concern will manifest itself remains to be seen, said Geehern, adding that much depends on just how severe the winter is and what transpires with other related issues, especially the broad subject of health care reform and proposed legislation with mandates requiring employers to assume more of the cost of that care.
The confluence of these issues will determine if and to what extent the region can build on some modest growth in manufacturing employment recorded over the past year, said Geehern.
Between October 2004 and October 05, the number of manufacturing jobs in the Greater Springfield area climbed from 39,600 to 40,200, he explained, adding that the 05 figure probably does not reflect layoffs at Springfields Danaher Tool plant, Holyokes Ampad facility, or other recent closings.
Geehern speculated that much of the 1.5% growth recorded since October of 04 came in the durable goods realm, specifically aerospace-related products and medical device manufacturing. This compares to relatively flat numbers the previous few years, and declines for much of the past decade.
That 1.5% increase may not sound like much, but its a pretty good number, especially when you look at the rest of the state, said Geehern, noting that, over the same period, manufacturing employment in the Commonwealth fell from 313,400 to 312,500, a .2% drop.
Given the projected increases in electricity and fuel prices and other factors that may increase the cost of doing business, the region is unlikely to see 1.5% job growth between now and next October, Geehern said, adding that while smaller increases are likely, overall job loss is a distinct possibility.
The worst-case scenario, he said, is that plant owners, especially those with facilities in other regions of the country or overseas will be prompted by those increasing costs to move operations out of the Pioneer Valley.
Bruce Stebbins, director of the regional office of the National Assoc. of Manufacturers (NAM), agreed that energy prices will likely be the most critical challenge for manufacturers in the year ahead. The reason is that the soaring costs touch producers in many ways from heating and lighting plants to production processes (most of which involve petroleum- based products of some kind) to shipping expenses.
And although theres a little more flexibility on pricing than there has been, its very difficult for most manufacturers to pass on those additional costs to consumers, he said.
Nancy Creed, a spokesperson for Springfield-based Western Mass. Electric Co., said new, much higher rates for electricity will go into effect Jan. 1. Increases, which result largely from soaring natural gas prices in the wake of Hurricane Katrina, will vary with the size of the customer, she told BusinessWest. Large users, many of them manufacturers, will see increases of about 50% over current rates, while smaller businesses will see costs rise about 28%. The rates are higher for the larger users because there are fewer of them and their demands are greater, she explained.
To date, there have been few calls to the utility concerning the increases and how to cope with them, said Creed, who expects that to change with the arrival of the first bills reflecting the new rates. WMECO is being proactive, she added, noting that letters have been sent to customers explaining the increases and outlining conservation programs.
Conservation is really their best tool, said Creed, referring to area business owners.We cant control the marketplace, butwe can help people control their consumption.
While doing battle with soaring energy costs, many manufacturers are facing another challenge, said Stebbins finding enough help.
Indeed, even at a time when some plants are closing or scaling back, many producers are struggling to find qualified workers, he explained, noting the problem is national, not regional in scope.
It is outlined in a study commissioned by NAM that identified what the agency is calling a workforce skills gap. More than 800 manufacturers were surveyed nationwide, said Stebbins, and roughly 75% of them said they have or had plans to hire, but cant find the help.
Theories abound, he said, but the probable causes for the shortage include the retirement of many long-time manufacturing sector workers and a subsequent shortage of replacements, as well as a general shift in opinion about the sector following substantial job losses in the 80s and 90s.
To inform young people about the opportunities that exist and eventually change some attitudes in the process NAM launched a program called Dream It, Do It. The initiative educates young audiences about jobs in the field and the educational requirements needed to perform them.
Locally, there is recognition of the fact that there are not enough qualified people out there, said Stebbins, noting that there is interest among area manufacturers inDream It, Do It and other programsdesigned to put more people in thepipeline.
Disappointment. That was our first, and most lingering, reaction to the news that Chicopee Mayor Richard Goyette was arrested earlier this month and charged with extorting campaign contributions from two city business people in exchange for favors from City Hall.
These are merely allegations and, as always, there is a presumption of innocence. But at the very least, Goyette has embarrassed his city and further eroded the publics trust in officials not only in Chicopee, but everywhere.
There was much surprise at the news, and much anger as well. After all, BusinessWest did endorse Goyette for a second term as mayor, believing that he had the leadership skills and common sense needed to move the community forward. We, like many Chicopee residents, feel betrayed and misled.
We have seen time and again the strong, negative impact of corruption in Springfield. Former Mayor Michael J. Albanos actions have left the citys residents bitter, skeptical, and far less willing to give appointed and elected officials their trust. Meanwhile, it has left business owners wary about the community and hesitant to make the kinds of investments we know are needed if Springfield is to rebound. We were of the opinion that area elected officials had learned from Springfields problems and fully understood the high cost of corruption.
We were wrong. If the allegations against Goyette are true, then he, like so many members of the Albanos administration, put his own interests above the communitys and with possibly dire consequences.
We say possibly, because there is a chance maybe a goodchance thatChicopee will sufferthe same fate as Springfield. That it willbecome the butt of jokes and the subject ofcountless newspaper and magazine articlessuggesting strongly that the communitysbest days are well behind it, with federalagents announcing one indictmentafter another.
Chicopee has enjoyed a strong resurgence in recent years. The second-largest city in the Pioneer Valley has seen an influx of new businesses from manufacturers in the Westover business parks to national retailers taking up residence on Memorial Drive. Meanwhile, it has also seen a number of public investments in the form of new schools, including two high schools, a new city library, and many infrastructure projects.
The city is primed for continued growth, and it is our hope that the city will survive this recent embarrassment and the crisis of confidence that may ensue. As weve said many times, while it is important for this region to have a strong Springfield, we also need a strong Northampton, Westfield, Agawam, West Springfield and Chicopee.
But someone else is setting up shop in Chicopee the FBI. Indications are that investigators have been turning over rocks in that community, and they are finding some things. We can only hope that charges against Goyette represent the end, not the beginning, of real trouble for this proud city.
In the meantime, we also hope that what transpired earlier this month with Goyette is not forgotten, and that lessons are learned from this fiasco.
Indeed, the worst thing about Goyettes arrest, and his silence thereafter, is that it gives people cause to believe that this kind of behavior is commonplace; it gives people license to say, theyre all like that.
Well, theyre not all like that. The vast majority of the people serving cities and towns in our region are honest, hard-working people who have only their communitys best interests at heart.
Still, this would be a great time (just a few days after the local elections) to remind all those fortunate enough to gain the favor of voters that a vote is an instrument of trust, and that trust is not to be violated or in any way taken for granted.
Maybe, in some small way, Goyette did this region a favor by reminding everyone who serves local communities about the price that is paid when greed, arrogance, or poor judgment overtakes responsibility, and when power corrupts.
If Goyette is guilty, he will certainly pay a high price for his actions. Hopefully, Chicopee and this region wont suffer the same fate.
There doesn’t seem to be much interest in this fall’s municipal election in Springfield, and that’s understandable.
Many Springfield residents are apparently of the opinion that the state-appointed control board is calling all the shots, especially with regard to the budget, and that it doesn’t really matter who is elected to serve the community as mayor, city councilor, school board member, or other office holder.
While the control board certainly holds most of the power in Springfield, it is wrong to believe that this election doesn’t have much meaning, especially in the mayor’s race.
The next two years will be pivotal for Springfield. What transpires will likely determine how soon the city can regain control of its finances, and what kind of community we will have when the control board packs its bags — hopefully in July 2007.
And that’s why we strongly endorse Mayor Charles Ryan for re-election. He has the strong leadership skills — and the ability to make hard decisions — that will be needed over the next two years. Ryan, who will be in his 80s by the end of 2007, will likely not seek another term beyond the next one, but he can use the next two years to construct a solid platform on which the next generation of Springfield’s leaders can operate.
Ryan was given an extremely difficult challenge when he took office in January, 2004: starting the process of repairing the considerable damage done to the city’s balance sheet, and its psyche, by an utterly corrupt Michael J. Albano administration. And we believe he has done an admirable job with that assignment.
Much work needs to be done in many areas, including public safety, education, and the broad topic of economic development, but we see some progress on many of these fronts. And any progress would be an accomplishment given the depth of the hole the city found itself in courtesy of its former mayor.
Indeed, the city had real problems with everything from paying its bills to putting police on the streets — and, as a result, had a massive public relations problem as well. Over the course of the past year or so, every major regional newspaper, from The Boston Globe to the Worcester Telegram to the Hartford Courant turned the spotlight on the City of Homes. The headlines varied but the theme was the same: ‘What’s Wrong with Springfield?’
The answer is complicated, and Ryan understood that going in. He also understood that the place to start — beyond the hard work on the city’s bottom line — was restoring trust in City Hall and the people who work there.
Albano’s legacy is a faulty bureaucracy defined by greed, cronyism, and rampant criminal activity. Ryan has taken major steps toward repairing the city’s tarnished image and restoring trust in local government.
With that foundation now laid, he should be given the chance to build on it.
We are especially eager to see progress on the economic development front. If Springfield is to see the kind of rebound everyone wants, there must be an infusion of new, well-paying jobs. To attract those jobs and the companies that provide them, the city must foster new-business development, while also focusing on what David Panagore, deputy executive director of the control board and this issue’s cover story, calls the “fundamentals” of economic development.
By this, he means a focus not only on the six or so major (and also stalled) projects in the city like Union Station, the old Hall of Fame, and the York Street jail, but also on safe streets, education, neighborhoods, and parks.
Charlie Ryan knows all about these fundamentals, and offers real leadership in the ongoing, and critical, work to give people reasons to live and work in Springfield.
Ryan has spent the past two years digging Springfield out of a very deep hole. But the job is far from complete. When it is, there remains the task of fully restoring confidence in a community that has little of that precious commodity left.
For both of these reasons, voters should take this fall’s election seriously, and give Ryan another two years to finish what he’s started.
Ruling Blurs the Line Between Public Use and Private Economic Development
In June of this year, the U.S. Supreme Court, in a 5-4 ruling, granted cities and towns the right to take private property to promote private economic development projects even though the Constitution prohibits the government from taking private property except for a ‘public use.’
The ruling, derived from Kelo v. New London, a land-use law case argued before the court on Feb. 22, 2005, ended a bitter, intently watched confrontation between homeowners and the City of New London, Conn. The case arose from New London’s use of eminent domain to condemn privately owned real property so that it could be used for economic development.
A private entity acting as the city’s legally appointed agent, the New London Development Corporation (NLDC), created a development plan that included the construction of a resort hotel and conference center, a new state park, 80-100 new residences, and various research, office, and retail space. In 2000, the city of New London approved the plan and authorized the corporation to acquire the land in the Fort Trumbull neighborhood.
The owners of approximately 100 of the subject lots agreed to sell to the corporation at a negotiated price. However, 15 owners did not agree, and the city ordered the development corporation to condemn the 15 holdout owners’ lots.
The last clause of the Fifth Amendment to the United States Constitution, known as the Taking Clause, states “nor shall private property be taken for public use, without just compensation.” The owners sued the city in Connecticut courts, arguing that the city had misused its eminent domain power, therefore violating the public use requirement of the Takings Clause of the Fifth Amendment.
However, the Supreme Court disagreed. The court, led by Justice John Paul Stevens who wrote the opinion, concluded that the government can legitimately use eminent domain if it believes it will “provide appreciable benefits to the community, including but by no means limited to new jobs and increased tax revenue.” Furthermore, the court reiterated its policy of deference to local municipalities in determining what public needs left the use of the takings power. As such, the NLDC’s conclusion that the 90-acre redevelopment area was sufficiently distressed to left a program of economic rejuvenation was entitled to deference by the court. Moreover, Justice Stephens cited cases in which the court has interpreted ‘public use’ to include not only such traditional projects as bridges and highways but also slum clearance and land redistribution.
Justice Stevens’s opinion provoked a sharply written dissent from Justice Sandra Day O’Connor, who wrote that the decision will “wash out” any distinction between public and private uses of property, leaving homeowners vulnerable to the whims of unelected planning agencies. Furthermore, Justice O’Connor contended that the “specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”
The decision also elicited strong opinions from those in academia. For example, Richard Epstein, Professor of Law, University of Chicago, wrote that “[t]he ‘public use’ test is so broad that no major government initiative fails to meet it, for every large-scale project could be justified in the name of ‘economic development’ even if the plan is a dead loser from the moment of conception.”
The backlash against the Supreme Court ruling has bolstered landowners and politicians to fight the seizures. According to a lawyer at the Institute for Justice, “It is finally dawning on homeowners and small businesses that ‘this could happen to me.’” A Quinnipiac University poll shows just how much the eminent-domain issue resonates. By an 11-to-1 margin, those surveyed said they opposed the taking of private property for private uses, even if it is for the public economic good.
Justice Stephens declared in his opinion that states may use their own constitutions and laws to limit eminent domain powers. In the six weeks after the Supreme Court’s ruling in the Kelo v. New London case, bills have been introduced in Congress and in more than half of the state legislatures that would restrict, to varying degrees, the use of eminent domain for private development.
In Massachusetts, a bipartisan group of state lawmakers led by State Rep. Bradley Jones, (R-North Reading), has filed a petition, a bill, and a proposed state constitutional amendment designed to limit the power of cities and towns to take private property by eminent domain. The bill would bar cities and towns from seizing private property solely for economic development except in cases where the property is “a substandard, decadent, or blighted open area” under state law.
Massachusetts has a history of unpopular and economically flawed takings. Two
famous examples are the eradication of four townships nearly a century ago to
construct the Quabbin reservoir in central Massachusetts, and the bulldozing of
Boston’s West End in the 1960s in the name of urban renewal. Both are now routinely lamented.
Local leaders and agencies such as the Boston Redevelopment Authority, who
fear that restricting the power of eminent domain will hamper their efforts to rejuvenate rundown neighborhoods by providing new jobs and increasing tax revenues, will likely provide strong resistance to the proposed bill.
These leaders and agencies will argue that the current legislative standards are sufficient and in recent years Massachusetts courts have held local officials to a relatively high standard of what constitutes the public good. They will cite a 2000 Superior Court decision barring Springfield from taking private land to build a minor league ballpark as an example of the impartiality and effectiveness of the current legislation.
In conclusion, courts have long struggled to determine what is a constitutionally permissible justification for taking property. Some argue that the Kelo decision is a landmark decision greatly expanding the government’s power to take private property
while others view the decision as not much of a change, as it has long been recognized that the government has broad powers to order the sale of property.
However, it can be definitively stated that businesses that hope to benefit from
an eminent domain taking can expect organized resistance and negative publicity
despite the intentions of the proponent.
Todd C. Ratner is a real estate and business attorney with the law firm of Bacon & Wilson, P.C., who specializes in business, transactional, commercial and
residential real estate law; (413) 781-0560;[email protected].
Learning a Lesson from China
China has shed its fabled economic isolation and is now a world-class trader that uses its advantages of size, scale and cost to compete in the international marketplace. The consensus is that within a generation or two, Chinas economy will equal Americas.
How did China advance so dramatically?
Historically, China has always had vast resources and formidable power but has only intermittently sought engagement with the wider community of nations. After many years of walling itself from the outside world, China is again welcoming foreign investment and engaging in international trade. While others debate globalization, China has mastered it.
Some are alarmed at the pace of Chinas economic expansion and seek to constrain it. We have seen the elements of this strategy in various proposals to erect barriers to U.S. imports of Chinese goods.
Not only are these attempts to inhibit Chinas international trading unrealistic, they are potentially damaging to the U.S. economy and job growth. A prosperous China with a rapidly expanding middle class represents one of the most significant opportunities for the United States.
U.S. producers across nearly every industrial sector from commercial aircraft to medical devices to integrated circuits recognize China as one of the worlds most promising export markets. Boeing, for example, will soon begin filling an order for 60 new commercial airplanes for China. Limiting U.S.-China trade might actually do more to inhibit job growth in Seattle than in Shanghai.
U.S. agriculture also has a growing stake in China trade policy: Since it joined the WTO in 2001, China has become one of the fastest growing markets for U.S. farm products, with exports tripling from $1.7 billion to $6.1 billion in 2004.
And thats just the export story. Last year, affiliates of U.S. companies doing business in China sold more than $75 billion worth of products to Chinese consumers and businesses.
Clearly, the U.S. has nothing to gain by adopting a protectionist posture. Rather than attempting to constrain the competition, we should adopt a strategy that will amplify our own strengths. Such a strategy has five elements:
- First, we must take advantage of the economic opportunities in our own hemisphere. Congressional approval of CAFTA was an important step toward creating more outlets for products made in the U.S. This should be followed by a revitalized effort to complete the Free Trade Area of the Americas, covering 34 nations.
- Second, we should deepen the Transatlantic Business Dialogue and work towards the creation of a Free Trade Agreement with the European Union. This would stimulate growth and provide an incentive for Western Europe to undertake reforms needed to keep their economies internationally competitive;
- Third, we must intensify our trade program in Asia in order to benefit from the increasing economic interdependence among the regions nations. Most importantly, we should build on the success of Indian Prime Minister Manmohan Singhs recent trip to the U.S. to deepen our trade relationship with India. And the U.S. should accelerate trade negotiations with Southeast Asia, including Vietnam, and open talks with Japan and Korea. China is already moving aggressively to tie neighboring economies to its own.
- Fourth, we must ensure a successful conclusion to the global negotiations in the World Trade Organization. This will further encourage China and virtually every important trading nation to live up to their WTO commitments and play by the rules of foreign trade;
- Finally, if we are going to meet this new competitive challenge, we must get our own house in order. The biggest concern of American industry, according to a recent Commerce Department survey, is not foreign imports but domestic policies and problems. Manufacturers cite rising healthcare costs, burdensome taxation, excessive regulation, and inadequate investment in research and education as the prime constraints to long-term competitiveness.
Chinas successful economic expansion is creating new wealth, for Chinese citizens and for Americans. As a society founded upon free enterprise, lets not complain that todays Chinese businesspeople are becoming too enterprising. We can learn a lesson from China: Isolation is not the answer. Instead, we must do what our nation does best: foster innovation, encourage entrepreneurship and boost productivity. That is how America will prosper.
Sy Sternberg is chairman and chief executive officer of New York Life Insurance Company. This opinion was first published in The Wall Street Journal on August 9, 2005.
Baiging Li played forward for two Chinese professional basketball teams in the late 80s before he took advantage of a rare opportunity to come to the United States and Springfield College to study sport management.
Since graduating, he has become, as he described it, a serial entrepreneur of sorts.
He started by creating a business focused on teaching Tai Chi, a Chinese system of physical exercises designed especially for self-defense and meditation, and has successfully grown that venture, establishing classes in many area clubs, senior centers, and health care facilities. Later, he started another business featuring tours of his native country. Over the past several years, he has led hundreds of people, many of them Tai Chi students, on visits to different areas of China.
His latest venture, one that seems laden is potential, is called ChinaAccess. It specializes in China/U.S. business development, and focuses specifically on helping business owners make connections and eventual partnerships with Chinese manufacturers.
As he shaped each of those ventures, Li leaned heavily on the Mass. Small Business Development Center Network (SBDC). A state agency (the only one anyone knows of that is based in Western Mass.), the center provides a wide range of free, one-on-one counseling, training, and capital support to people who want to do everything from start a business to sell one.
"We act as an objective, experienced set of eyes and ears for people who need some help getting started or to the next level," said Diane Fuller Doherty, director of the SBDCs Western Mass. Regional Office, located in the Andrew M. Scibelli Enterprise Center at Springfield Technical Community College. "Were there to be a resource for people facing the many challenges of business today."
In Baiging Lis case, the center helped with everything from business plans to obtaining a green card, said Fuller Doherty, who told BusinessWest that Li has always had entrepreneurial drive and also many valuable connections in China. What he needed was some help with the details and the hurdles that challenge all small business owners, from initial financing to deciding how much insurance to carry.
Georgianna Parkin, state director of the SBDC, said the agency has become an effective economic development resource over its 25-year existence, as it works to both create and retain jobs. It addresses this goal through a network of offices, or consortium, that includes the Isenberg School of Management at UMass-Amherst (the lead institution) and also Boston College, Clark University, Salem State College, UMass-Dartmouth, UMass-Boston, and the Mass. Export Center.
"The statistics show that small businesses are the backbone of the nations economy," she told BusinessWest. "We work to strengthen that backbone."
In recent years, the SBDC, funded by the U.S. Small Business Administration, the state, and UMass and other consortium members, has worked to dispel the notion that it works only with, small mom-and-pop operations, said Parkin. She told BusinessWest that small is a relative term when it comes to classifying businesses. By some definitions, that word describes those with 500 employers or fewer, and by others, the benchmark is 100 employees, she said, adding that the SBDC has assisted companies in both categories.
Still, the bulk of its work, especially in Western Mass., is with companies with 10 or fewer employees. In many cases, the businesses are sole proprietorships, as is the case with Deliso Financial and Insurance Services.
Jean Deliso, founder, told BusinessWest that after years of working for a large financial services company in Florida, she wanted to return to her native Springfield and start her own business. She went to the center for counseling because, while she was confident in her ability to help individuals make sound investment decisions, she knew she could use help with such matters as marketing her business and even picking a name for it.
"When youre a sole proprietor, getting help is important; this is a lonely game," she explained. "I dont have a board of directors, no business this size does. Its great to have a resource like this with knowledgeable people who can say, yes, youre doing it right, or no, youre not."
BusinessWest looks this issue at how the SBDC has counseled business owners like Deliso and Li and, in the process of doing so, become a driving force in job creation has for the region.
Foreign Concepts
In two months, Li plans to lead of small contingent of Western Mass. business owners on a trip to the Shandong region of China. Located between Beijing and Shanghai, it is home to roughly 93 million people and businesses in fields ranging from agricultural manufacturing and production to auto making.
The purpose of the junket with all or most of the expenses paid for by the Chinese government is to help forge partnerships between Chinese industry groups and individual companies and U.S. business owners who are being advised, and in some cases told, by major clients to find ways to collaborate with China and other countries where the cost of doing business is considerably lower than it is here.
Keith Stone is one such business owner, and he may well be on the plane in October.
Stone, president of Agawam-based Interstate Manufacturing Company (IMC), and also a relatively new client of the SBDC, told BusinessWest that Hamilton Sundstrand, a division of United Technologies Corp. and one of his largest customers, wants him to partner with companies in India and China, in an effort to secure both high quality and low cost for its parts.
Stone is now working with Li in what promises to be a lengthy process to establish such partnerships. And Stone credits help from the SBDC with putting him in a position where he can take such a bold step.
Indeed, when Stone first visited the Mass. Small Business Development Center (SBDC), his business was a critical crossroads.
IMC was created to make tools and fixtures required for the assembly of parts primarily for the aerospace industry. Following 9/11, virtually every company that did business in that sector was hit and hit hard, and Interstate was one of them.
The company fought successfully to avoid bankruptcy, and business eventually improved somewhat. But even this past spring, Stone wasnt sure if his entrepreneurial venture was going to survive.
His visit to the SBDC and one of its advisors, Alan Kronick, was broad in nature, Stone told BusinessWest, adding that he was looking for some advice and direction on how to remain competitive in a changing marketplace. Kronick and other counselors provided assistance in several areas, but especially with the complex process of being positioned to bid for projects with defense contractors.
"Alan understood what I was going through, and hes helped keep me focused on where I am and where I need to be," said Stone. "Its great to have a fresh perspective on things on things like cash flow, projections, and different ways to cut expenses; he can see things that I cant."
Stones story is typical of how the SBDC works to help companies get in business and stay in business, thus fueling economic growth in all regions of the state.
"Small businesses are truly the engine driving economic development, especially in Western Mass., said Fuller Doherty. "This is where most of our net new jobs are coming from; entrepreneurs are providing jobs not only for themselves, but many other people."
Over the years, the Western Mass. office of the SBDC has helped hundreds of individuals like Deliso, Stone, and Li. Between Oct. 1, 2003 and Sept. 30, 2004 (the latest statistics available), the office assisted 618 clients, providing more than 2,626.25 hours of counseling.
More than half of those clients sought assistance in the broad category of business startup, said Fuller Doherty, noting that there are many other areas of counseling, ranging from business plan and loan package development to strategic needs assessment and marketing/sales.
In general, the center helps small business owners stay on track, said Deliso, noting that entrepreneurs like herself are versed in their particular area of expertise in her case, accounting and financial planning but not necessarily in the many facets of running a business.
"Take marketing for example," she said. "They helped me develop a marketing plan and figure out where and how I should be spending my money. Those are the kinds of things small business owners need help with."
Name of the Game
Richard Green came to the SBDC last spring, when he was entertaining thoughts of opening his own insurance agency. A long-time insurance industry veteran, Green drafted a preliminary business plan earlier this year, and drew some encouraging remarks from his lawyer, who nonetheless advised him to seek a second opinion.
"He told me that I was in the middle of the forest and needed to find a way to see through the trees," Green recalled. "He said I needed another pair of eyes."
Those eyes turned out to be Fuller Dohertys, and Green recalls that she didnt sugarcoat anything about the process of getting his venture off the ground.
"Theyre not there to pat you on the back, tell you everythings great, and send you out there," he explained. "They ask the hard questions, starting with whether you have what it takes to be in business for yourself."
An evaluation process revealed that Green did indeed have the requisite desire, talent, and capital to start his own venture. Richard Green Insurance Inc. opened for business on Elm Street in Hampden earlier this summer; a grand opening is set for later this fall.
During the process of getting his business started, Green said he turned to the SBDC for counseling on matters ranging from office furniture the center provided names of area dealers to what to name his venture.
"Putting my name on the company wasnt my first choice," he revealed. "But people at the center told me that I should use my name and then stand behind it."
Deliso said she faced the same dilemma. As she began the process of starting her venture, Deliso said she was wary of putting her family name on it. Her grandfather, Joseph Deliso, was a successful entrepreneur and founder of HBA Cast Products, while her parents started several other ventures, including Tool Craft and Pioneer Tool.
"That name was one of the reasons I left the state," she said. "I didnt want to be merely my grandfathers granddaughter; I wanted to do it on my own.
"But people at the center got me to see that this was a name that people associated with success, and it was a name I should utilize," she continued. "That was a real turning point for me; that was the right decision to make and they helped me make it."
The center has helped Li make a number of right decisions in his decade-long association with the agency. While some of his needs and challenges are unique obtaining citizenship, for example most are fairly typical.
"The center has been very helpful with all of my businesses," he said. "In the beginning, a lot of things were unclear to me, like how to make a plan, contact people, and follow through; theyre helped with all those things.
"Theyre teaching me ways to look at the big picture," he continued. "Thats where my focus needs to be."
As for the October trip to China, Li said he is using the SBDC as a resource to help identify area businesses, such as Stones, that might benefit from what he called the ultimate learning experience.
"Through this visit, people will have a clear idea of how Chinese business operates," he said. "Thats important, because partnerships are how companies here and there are going to be successful."
Bottom-line Analysis
Assessing his entrepreneurial exploits to date, Li said that, like all business owners, he is continually reviewing his ventures with an eye toward continued growth and profitability. In other words, hes not resting on any laurels.
"You cant do that," he said, adding that the learning process that is part and parcel to being a successful business owner never really ends.
"I still have many things still to learn about business," he told BusinessWest, adding that he considers himself lucky to have a resource like the SBDC. "Theyve kept me going in the right direction."
George OBrien can be reached at[email protected]
A New Plan of Action for The Bosch
American Bosch manufacturing complex
Months ago, an ownership team was conducting a series of formal and informal studies designed to gauge whether all or some of the sprawling former American Bosch manufacturing complex could be salvaged for future development. All debate was ended by a Dec. 16 blaze that effectively gutted the landmark. Now, as demolition commences, talk is of what might develop at the nine-acre parcel at the Springfield-Chicopee line.
TJim Sullivan was heading back to Holyoke from a meeting in Boston last Dec. 16 when his cell phone rang.
Usually, Sullivan, treasurer of the OConnell Development Group, can talk and drive at the same time. But after only a few seconds of conversation he decided hed better pull over.
The Bosch, he was told, was on fire.
Thats the name people have used for decades when referring to the former American Bosch manufacturing complex on Main Street at the Springfield-Chicopee line. OConnell was, and is, part of an investment group known as MSBB, LLC that owned the sprawling, vacant and uninsured buildings, and had been exploring a wide variety of development options for the property.
It was an admittedly long-term project that was about to become exponentially more complicated and expensive.
"It was a quick trip back from Boston," Sullivan told BusinessWest, adding that, when he arrived at the scene around 6 p.m., the buildings were fully engulfed.
"I stayed until around midnight I didnt really know what else to do," he said, adding that he found himself joined on that frigid night by several former employees of the German-based company, which manufactured radios and other products at the Western Mass. facility. "People had tears in their eyes Ö many of them were very emotional; they had many fond memories of the years they spent there."
Sullivan didnt cry that night, but no could have blamed him if he did. The fire, which raged throughout the night, effectively gutted the imposing structure, rendering it unfit for any type of development. And, contrary to popular opinion, the blaze, while it has in some ways accelerated the process of developing that nine acres of real estate, has not facilitated it.
"People have come up to me and said, I guess this makes your job much easier," said Francesca Maltese, development manager at OConnell who is also involved in the Bosch project. "In fact, the fire makes everything harder, starting with demolition, and it means were spending money, and lots of it, when were not taking any in."
Started earlier this summer, the complex demolition process is expected to take at least the next six months. When the parcel is cleaned, the task of developing it will be easier than it is now, said Maltese, noting that it is difficult for many would-be investors to adequately evaluate the site when it is still dominated by a burned out hulk.
Still, easier is a relative term. While both Sullivan and Maltese say a number of potential uses are being explored, from health care to housing, manufacturing to retail, it is difficult to gauge how much interest there will be in the property.
Sullivan said the so-called Wason section of Springfield has repositioned itself in recent years, from a manufacturing center to a home for health care facilities ranging from physicians offices to Baystate Health Systems DAmour Cancer Center. Whether that trend will continue at the Bosch site isnt known, he said, adding that, for now, the focus is on preparing the property for development.
BusinessWest looks this issue at how the December fire has changed the equation for The Bosch and what the strategy will be for developing what must be considered a prime piece of real estate.
History Lessons
Maltese told BusinessWest that during one tour of the main four-story manufacturing/administration building at the Bosch complex, she came across some old plans for the structure.
"I decided I better take them before the mice ate them," she said, displaying one drawing, still in good condition, dated 1910. It shows three ornamental medallions, featuring the corporate symbol for the Bosch company, that would grace the exterior of the building.
Those medallions will be carefully extracted during the demolition process and shipped to Bosch headquarters in Stuttgart, she said, leaving this region with only memories of the plant and there are many of those.
Bob Forrant, a former machinist and business agent for the union at American Bosch in the 70s and 80s, and now an unofficial historian of the plant, told BusinessWest that, at its height during World War II, the company employed perhaps as many as 20,000 people. "They ran 24 hours a day, seven days a week."
One of many machining and manufacturing facilities that helped give Springfield its reputation and its nickname (the City of Homes) the Bosch was a coveted workplace. "That was the best place to work in the Connecticut River Valley," said Forrant. "They took good care of their people Ö everyone wanted a job there."
Opened just before World War I, the plant was taken over and essentially operated by the U.S. government during that conflict, said Forrant, noting that American leaders considered any German-controlled plant a security risk. After the war, the government gave the plant back to the Germans, who operated it until the second world war, when the government again took it over. After that conflict ended, officials put the plant out to bid, and it was purchased by a group of U.S. investors and became American Bosch.
The Springfield plant was expanded in the early 1940s with the addition of a one-story manufacturing facility. Eventually, the complex grew to more than 500,000 square feet. Over the years, workers produced a wide range of products, including motors for car seats and windshield wipers, and, in its later years, fuel-injection systems for trucks and the M 1 Abrams tank.
American Bosch was purchased by United Technologies Corp. in the mid 70s. UTC closed the facility in 1986 after years of gradual downsizing, part of a larger movement of manufacturing operations from New England to warmer, less costly areas of the country. The property had several owners and a few uses (most of them warehouse-oriented) over the next several years, said Forrant.
The complex was eventually acquired by a small development group, headed by John Bonavita, creator of Springfields Tavern Restaurant, among other projects, that was known as Crossbow, LLC. The OConnell Group, which has developed a number of buildings and parcels in the region, including the Crossroads business park in Holyokes Ingleside area, became partners in the Bosch venture in the spring of 2003.
"We looked at it as a long-term development play," said Sullivan. "Actually, a very long-term development play."
In the months after becoming part of the ownership team, OConnell explored a number of options for the Bosch property, said Sullivan, adding that the talks included consideration of both rehabbing the buildings on the site and demolition of those facilities and subsequent redevelopment.
"We looked at everything, from soup to nuts," he told BusinessWest. "We explored medical uses, retail, residential development, every option we could think of."
And while no official determination was actually made on whether to rehab or demolish the buildings, he said, the general feeling was that the one-story manufacturing building could not be reused, and that the four-story structure could, with great imagination and determination, be retrofitted.
But the fire last December brought a swift end to any and all debate.
Out of the Ashes
Suspected to be a case of arson, the intense fire leveled the one-story section of the complex, and caused irreparable damage to the main building. In the days following the blaze, many former employees of the Bosch, Forrant among them, drove by the site to survey the damage and reflect. Local historians said the city had lost an important piece of its industrial heritage.
For MSBB, LLC, the fire dramatically altered the course, timeline, and financial dynamics of the already-challenging development venture.
For starters, the blaze and the damage caused by it will greatly increase the cost of demolition, said Sullivan, who declined to give a specific figure but said it will easily exceed seven figures. Razing the structures will be a more risky proposition, he said, because the buildings are less stable than they were before the fire, making the work more time-consuming, and thus raising the price tag.
The high cost of demolition is one of the many factors that make the fire much more of a hindrance than a help when it comes to developing the property, said Maltese, adding that the fire has ultimately robbed the ownership team of flexibility with regard to the cost and timetable of the project, something that many not in this business do not understand.
"The common perception is that the fire solved a problem for us," she said. "It didnt. In fact, it created more problems for us."
When asked if MSBB can ultimately recover the costs of razing the Bosch property and make this venture profitable, Sullivan offered a conditional yes. He said much depends on the market, the level of interest in the site, and the intended future use of the property.
Over the past several years, the Wason section has been the site of a wide range of health care and biotech developments. Only a few blocks from Baystate Medical Center, the area is now home to the Biomedical Research Institute, which Baystate has created in conjunction with UMass Amherst. That stretch of Main Street is the site of many health care-related ventures. Baystate has several facilities in that neighborhood, including its cancer center, Pioneer Valley Life Sciences Center, Baystate Rehabilitation Center, and others.
Meanwhile, Atlantic Capital Investors has rehabbed several old manufacturing buildings in the area for health care and related uses. Partners Ben Surner and Mark Benoit have converted a former factory at 3500 Main St. into the new home for the Pioneer Valley Chapter of American Cross and other tenants, while also combining rehab of the former Wason Trolley building with new construction to create a complex that hosts Baystate Reference Laboratories, Novacare Rehabilitation and Physical Therapy, The Hand Center of Western Mass., and other health care businesses.
Surner and Benoit are also moving forward with plans to create the Brightwood Medical Arts & Conference Center in a large manufacturing building that actually abuts the Bosch complex.
"So health care is certainly one possibility for the Bosch property," said Sullivan, adding quickly that there are many options, including retail, residential development, and others.
MSBB is not actively marketing the property at this time, said Maltese, adding quickly there are discussions going on at a number of levels. She told BusinessWest that talk, and marketing efforts, will escalate as the demolition process continues and developers can properly evaluate the real estate.
Forward Thinking
As they talked about the Bosch property and its potential for development, both Sullivan and Maltese struggled with which tense to use with regard to the buildings on the site.
Both the present and past work, said Sullivan, noting that while the landmarks are still there, from a literal standpoint, from a development perspective they are gone, and have been since the night of the fire.
For the most part, though, those at MSBB are focused on the future. What will transpire at that the Bosch site remains to be seen, but there is cautious optimism that a productive new use can be found, one that might ease some of the many loses incurred on that night last December.
George OBrien can be reached at[email protected]
"We have to save the place or change it." That was the message UMass-Amherst Chancellor John Lombar-di left with state legislators at a hearing last month held by the recently created Committee on Higher Education. Lombardi told the panel, which includes state Sen. Rosenberg, D-Amherst, that the campus is at a critical crossroads and, "under enormous stress."
He talked about neglected buildings that were falling apart, laboratories that needed new equipment, faculty that needed to be added, and fees that have been consistently increased about 40% over the past four years alone.
The basic message he was sending? That unless something is done unless a major commitment is made to the university the campus will have a very hard time merely maintaining its current levels of quality, let alone becoming the major research center that everyone hopes it can some day become.
We hope the message resonates not only with the higher education committee, but with the full Legislature.
Before we elaborate, we must say that there are plenty of budget priorities in this state and, as Michael Widmar, president of the Mass. Taxpayers Foundation, points out in the opinion piece below, the state is far from being out of the woods when it comes to sound fiscal health.
Indeed, the list of new and existing programs that need a boost in the next few budgets is long and getting longer. It includes new health care initiatives, school building programs, infrastructure projects, capital spending, and a widely supported proposal to fund early childhood education for all children in the Commonwealth.
UMass, and especially its Amherst campus, have a place on this list although the House Ways and Means version of the fiscal ’06 budget, released late last month, does not appear to make the university a priority. That budget plan includes only a $5 million increase for the entire five-campus system, which has an overall budget of $392 million (down from $529 million in 2000). You can do the math, but we’ll do it for you. That’s a mere 1.2%.
The state university needs, and deserves ,much more.
We’ve said many times and as recently as last month, when we came out in support of a recommendation from a task force on higher education to boost spending on state and community colleges and UMass by one-third over the next several years that the Legislature must look upon spending in this area as an investment, not an expense.
Why? There are several reasons, starting with the fact that state schools wind up educating many of those who will eventually live and work in the Commonwealth. But also because these schools, especially UMass and its Amherst campus, are more than seats of higher learning they are drivers of economic development.
If the Pioneer Valley wants to some day move out from under the enormous shadow of Boston and the Route 128 corridor and be a center of job creation, the Amherst campus will be the driving force that makes that happen.
But it can’t handle that assignment when it is fighting to keep its head above ground.
During his testimony before the higher education committee, Lombardi referenced the Old Chapel, the university’s oldest and most photographed building. It’s been closed to the public for six years because it is such deteriorated condition it has been deemed unsafe.
This sad state of affairs is tragic and clearly symbolic of a university in neglect, but the chapel is not the reason why the Legislature needs to ante up and give the Amherst campus a meaningful budget increase.
A boost is needed because if current patterns continue, the university will not only fail to move forward, it will slide back in terms of reputation, research, and the number of quality programs. And if that happens, the state will pay a price.
It’s like Lombardi said; ’the university is at a critical crossroads.’
The new convention center taking shape on Main Street in Springfield will open its doors in a few months. As the countdown continues, so does speculation about what this $50 million facility will mean for the city and the Pioneer Valley as a whole.
Indeed, depending on who is offering the opinion, the center will either be a huge boon to the local economy and the centerpiece of its growing tourism sector, or it will be a dud, an elephant of the color of the facilitys exterior walls white.
Our guess is that it wont be either at least not right away.
We believe that the convention center/civic complex, to be known as the MassMutual Center, will be an asset for the region, and that it can fulfill what is its basic mission to provide revenue for the state through the taxes that will be paid on the hotel rooms it will fill.
How soon the center can become this asset remains to be seen. For now, we believe it is important for area residents to keep things in perspective.
Thats because there are a number of factors that may contribute to a slow start for the center, beginning with the fact that convention planners often think several years out, and this facility has only been on the market for about 18 months or so. And what those marketing the facility have been able to sell with, to date, are color photographs in a brochure and on the Web. They should do much better when they can offer walking tours of the center.
But there are other considerations beyond mere timing.
The convention and meeting business is extremely competitive, and it will only become more so in the years ahead. Only a few miles down I-91, Hartford is creating a new convention center that will be larger than Springfields and offer more amenities. Meanwhile, other cities, including Worcester, Providence, and Lowell, are heavily marketing their cities and meeting facilities. And dont forget about Boston, which is having its own troubles securing business for its massive new convention center.
It would be a stretch to consider any of the smaller competing cities, especially Lowell and Worcester, as garden spots. But then again, Springfield certainly wouldnt be classified as an easy sell at the moment. Indeed, while those competing communities have their own problems, none are being managed by a control board and none are the focus of an ongoing corruption probe that yields a new, embarrassing headline seemingly every week.
Despite Springfields current public relations problem and the heightened level of competition in the meeting and convention market, we believe the MassMutual Center can enjoy some success if it is marketed properly and if it gets some help in the form of continued progress in downtown Springfield, especially another hotel.
Marketers must target the right audience for this facility. While it is possible that the city will play host to national associations or groups (some already come here regularly), it is more likely that it will attract the Northeast, New England, or Massachusetts chapters of those groups.
To draw them, those marketing the new convention center must focus on selling the region, not the city of Springfield. This is not meant as another dig at the city and its many problems, but merely acknowledgement that what will bring groups to the area isnt its capital city, but rather the sum of the Valleys parts.
Increasingly, meetings and conventions are family affairs, and, with its mix of attractions ranging from Six Flags to the Basketball Hall of Fame to Yankee Candle, the Valley has much more to sell than most of its direct competitors.
This doesnt mean that it will be easy to sell the MassMutual Center. For all the reasons weve listed above, the facility may struggle at the start. We hope that time is short and that the facility proves worthy of its pricetag.
The commonwealth needs the room-tax revenue and the region needs a facility to take its tourism business to the next level. We believe the MassMutual Center will eventually achieve both missions.
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Massachusetts does not use public elections to decide who holds judgeships. Some say it should even though attorneys close to the system say that theres no way the average citizen could understand all the complexities that go into sentencing decisions.
Earlier this summer, the proprietor of a Holyoke Dairy Mart was shot to death at his store. The assailant was the same man who had robbed the store only a week before.
"Lets look at this individual more closely,"Holyoke Police Chief Anthony Scott told BusinessWest. "A year prior, he was arrested for armed robbery, and on a recommendation from the district attorney and the defense attorney, he was given three years probation for armed robbery and one year in a house of corrections for possession of stolen property and a judge went along with that."And last September, Scott said, a man was arrested by Springfield police three times in one week, two of those for possession of firearms, and was released on his personal recognizance each time.
"Who gets the blame for that?"he asked. "The police but they didnt release him. The judges excuse is that I was just going along with recommendations, but whose court is it? Its not the district attorneys court or the defense attorneys court its the judges court."Alarmed by what he feels is a rash of leniency in the courts, Scott has been crusading to establish a certification system by which voters would affirm or deny a judges further service after a set term in office.
In doing so, he has shed a spotlight on the way that judges are now installed in Massachusetts a system that does not involve elections or other public input, yet one that has seen a number of changes over the past several years.
Streamlining the Process
The significant difference between the current system of selecting judges and the one used prior to Gov. Mitt Romneys administration is a more centralized, less regional approach, said Nancy Frankel Pelletier, a civil trial lawyer with Robinson Donovan in Springfield.
Under previous administrations, Pelletier served on a group of attorneys representing Western Mass.; other committees were appointed for other regions of the state.
"We were responsible for supplying names to the governor for the district court and any clerks or clerk magistrate positions, and the initial interviews were done by the regional committees,"she told BusinessWest. "There was a group based in Boston with attorneys from all over the state that would do the same thing on the superior court and appellate-level court; there was no regional committee for that."Each county bar also had a representative to review applicants, while other bar associations, such as the Womens Bar Association, were allowed to weigh in during the process as well. Eventually, a slate was submitted to the governors chief legal counsel for final approval.
"Although it was an honor to serve on the committee, it took an inordinate amount of time,"Pelletier said. "We reviewed every application that came in literally hundreds of them and wed narrow it down multiple times until we got a slate together. And thats after doing at least one round of live interviews at the regional level."When Romney took office, he wanted to streamline and centralize the process, so he dismantled the regional committees and established one statewide, 21-member Judicial Nominating Commission to perform the same task. Jeffrey McCormick, an attorney with Robinson Donovan, now serves on that committee as a Western Mass. representative.
According to the current system, the committee begins with an initial blind review of applicants, then invites a number of them for interviews, followed by deliberations about their strengths and weaknesses and whether they would adequately meet current judicial system needs. A candidate must receive 13 votes from the panel to have his or her name sent to the governors office for final review.
"Theyve cut a layer in terms of active participation at the district court level,"Pelletier said. "Theres also no more participation from the bars in the manner that used to exist.""I thought former Gov. Cellucci had an interesting way of managing the process,"John Sikorski, another Robinson Donovan attorney, said of the previous, regionalized approach. "Romney said he wanted to take politics further out of the process and set up one panel. And Jeff is the only person from the Pioneer Valley on that committee."In the Public Eye
Scott sees a flaw in that system the fact that the public has no say over a judges activities once he or she ascends to the bench.
"Judges should be certified by the people,"Scott said, stressing, however, that this concept is much different than demanding that judges be elected.
"When you say elected, that means a judge has to go out and campaign, raise money, put up signs, shake hands, all that,"he said.
Under his idea, judges would still initially be appointed by the governor to a set term perhaps six years, he said.
At the end of that term, on Election Day, the judges name would automatically appear on a ballot in the county in which he or she serves. In addition, the judges sentencing record for major crimes, as well as his or her bail-setting record for those offenses, would be published in newspapers and distributed via public-access television using public funds.
"Then the people will make a decision when they go into the voting booth should this judge be retained, yes or no?"Scott said. "If more than 50% of the voters say yes, they retain their job. If more than 50% say no, theyll have to get another job.
"They would be running against themselves their record and their service to the community,"he continued. "At the present time, judges are not accountable to anyone, which violates Article 5, Part 1 of the Massachusetts constitution, which states that elected officials and judges are accountable to the people that means us. And right now, theyre not accountable to anyone."Pelletier disagrees, saying the present appointment system provides plenty of checks and balances, and subjecting judges to what amounts to a politicized process would not result in the best candidates serving on the bench.
"Theres a distinct difference between the understanding of a judge and that of a layperson or even a chief of police,"she told BusinessWest. "A judge may be forced, because of legal problems, to release people. We see it all the time, and its not the judges fault. Its easy to attack that judge if there are problems that result in an appearance to the outside world of being soft on crime, but its much more complex than that."Pelletier said that, during the Cellucci administration, four vacancies arose on the Supreme Judicial Court. Because it was impossible to seat four judges quickly within the confines of the system, the governor created, by executive order, a committee to facilitate the process, one that Pelletier was called to serve on.
"We interviewed every individual who applied, and the level of legal sophistication was extraordinary,"she said. "Many of these people were brilliant attorneys or jurists, or appellate judges seeking to go to the top level, but they were not political beings. We would not have been fortunate enough to have the four judges that were appointed had the process not been apolitical."Doing Their Duty?
Such talk doesnt appease Scott, who had legislation filed last year to get the state to conform to his interpretation of its Constitution. But he said the bill was reworded in a Senate committee to the point that nothing would change; hes now working with local lawmakers to file an amendment.
"People rely on judges to protect them, along with police and the district attorney. Judges have failed in their responsibilities,"he said, returning to the convenience-store murderer. "The perpetrator should have been sentenced to a minimum of three years in prison (for the original robbery), and the guy wouldnt have lost his life.
"Ive got many stories like that, and it all boils down to accountability. Some of the judges defenders say Im using anecdotal examples, but it isnt anecdotal to those people who are the victims, is it? The bottom line is that judges are not accountable."Pelletier said that opinion would not be widely held in the legal community, and that its easier for an outsider to attack a judge without knowing the complexities of the system. Even though Scott is not calling for a system that requires judges to campaign, she still worries about anything that would politicize the process.
"I certainly would not favor it,"she said. "Doing that would not allow a person without a political personality but who has a great legal mind to get on the bench."For some, however, what constitutes a great legal mind and what process should be used to determine that remains an open case.
A panel of business and academic leaders has determined that the state’s court system is ’mired in confusion’ and in need of sweeping reforms. But achieving those changes which begin with clearer administrative authority and tougher performance standards won’t be easy.
Discussions of legal issues often tend toward excessive wordiness. This one, however, got right to the point.
By blasting the Commonwealth’s judicial system as being "mired in confusion" and dysfunctional in its management structure, a panel called The Visiting Committee on Management in the Courts might have raised a few eyebrows, but didn’t shock too many observers of the courts.
How to fix the courts’ problems, however, is where differences of opinion begin.
The Visiting Committee, a panel of business and academic leaders appointed by Supreme Judicial Court Chief Justice Margaret Mitchell with the backing of the state Legislature and Gov. Mitt Romney’s administration is calling
for a sweeping program to repair the system’s inefficient workings. The strategy includes installation of a clearer administrative authority, tougher performance standards for lagging courthouses and employees, and a more disciplined budget process.
The recommendations all indicate that inefficiency is the problem, but to suggest that this stems from the different methods of doing business from district to district might be a mistake, said attorney Nancy Frankel Pelletier, a partner and member of the Executive Committee with Robinson Donovan, P.C. in Springfield.
"There is generally complete inconsistency in terms of how the courts are managed, and that’s at all levels. Each county essentially handles its business differently," Pelletier said. "Obviously, some people at the top feel that doesn’t make any sense.
"However," she continued, "frankly, I’ve found over the years that the courts that are the most autonomous do business more efficiently that those governed from on high. Inconsistency might not be a negative thing."
What is hurting the system, she and other lawyers assert, is a badly funded system that leaves courts hurting for key personnel and backs up the process for plaintiffs and defendants who deserve prompt service. But that’s an old story, and it’s not one that’s bound to improve as Romney seeks to make statewide cuts in order to close a $3 billion state budget shortfall.
The Visiting Committee’s report isn’t the first of its kind, legal experts say, and it won’t be the last. And addressing its sweeping proposals might be a losing proposition without the funds to back up the effort. If the courts are indeed drowning in inefficiency, they tell BusinessWest, this report may be a cry for help, but, under the current economic circumstances, it isn’t exactly a life preserver.
Serious Indictment
The report does aim to be just that, however, by aggressively detailing a number of problems plaguing the courts and outlining possible solutions. Chaired by J. Donald Monan, chancellor of Boston College, the committee recognized "pockets of excellence" in the system, but said that, for the most part, constituents are not getting the justice they deserve because of inefficiency and slow case resolution.
"Today, the courts of Massachusetts are mired in managerial confusion," the report says. "The impact of high-quality judicial decisions is undermined by high cost, slow action, and poor service to the community."
That managerial chaos means court personnel and managers don’t know where to turn for guidance, while reporting lines are vague at best, the report asserts, adding that the situation could be remedied by increasing management experience in the Judiciary administration. That concept met with mixed reviews locally.
According to Paul Rothschild, a partner with Bacon & Wilson P.C. in Springfield who specializes in civil litigation, studies have shown that placing management of the court system in the hands of judges has not worked.
"The Judiciary is not the appropriate party and is not trained and capable of managing the system," Rothschild said. "It should be run by managers with some type of management experience. The system is in disarray, and it needs some type of professional management and some clear financial support from the Legislature and the governor to put it together. The goal is to find the most efficient, effective way of running the courts, and we clearly don’t have that now."
However, Pelletier said, it’s difficult for managers to have a full understanding of the system without legal expertise. "There are those, and Gov. Romney might be one of them, who think we need a professional manager, not a judge or lawyer, to manage judges and lawyers," she said. "But I don’t think that will work because, to properly manage the system, I think you have to have a complete understanding of how justice is administered from within."
The panel also took the judicial system to task for how inefficiently resources are allocated. The committee recommended that budget and staffing requests and allocations be made on demonstrated needs, not history, and that the budget request process be redesigned so that resources are directed to courthouses in need, among other changes.
That could be good news for Springfield’s court officials, who have long complained that funding for Hampden County has been disproportionately low compared to what courts in Eastern Mass. receive.
"This has been an ongoing problem," Rothschild said. "The Springfield District Court is the busiest court in the state, especially by virtue of criminal case load, and it was considerably underfunded compared to those in the Boston area."
The Jury Is Out
But the question of efficient allocation of resources has come up in several recent studies, he added, none of which explicitly addresses the problem Springfield faces.
For instance, Romney has proposed merging the Boston Municipal Court, which acts as its own entity, into the district court system and closing a number of district courts, eliminating some duplication in administrative staffs. Meanwhile, the Legislature has come up with its own proposal that would expand the scope of the Boston Municipal Court to encompass several other municipal courts around Boston, also removing some duplication of duties while evening off the money spent in various districts.
But if the funding disparity doesn’t directly address Springfield, area law experts say, the city will see more problems such as what emerged last year when a funding shortage forced a decrease in the number of court stenographers. While criminal cases got priority, attorneys saw a major logjam develop on the civil side.
Sam Stonefield, an attorney and professor of Law at the Western New England College School of Law, said the funding disparity in Western Mass. courts has reached crisis levels, but, as the flurry of recent studies and reports have shown, there isn’t sufficient consensus to address the issue.
"If you look at budget allocation, there’s clearly no agreement. When you look at performance guidelines, there’s no agreement. And in the hiring and supervision of employees, there’s no agreement in the three branches of government or within the Judiciary itself," Stonefield said. "I think that undermines the performance of the court system and ultimately undermines its ability to deliver justice to its citizens."
Meanwhile, Rothschild said, every cutback affects Western Mass. courts more than it does those closer to Boston, and that affects morale since clerks and other employees don’t know if their jobs are safe. At the same time, cases move more slowly, and justice grinds to a crawl.
In addressing what he considers the top two issues facing the courts, funding and budget allocation "the allocation of resources is indefensible," he said Stonefield hopes the Visiting Committee’s report can serve as a template to try to bring together some of the disparate voices calling for change.
But he said there must be a framework for judging the performance of the courts before there can be meaningful change in how those courts are funded. It’s a similar situation to that of education, which developed the framework of the MCAS exam to better understand how resources should be channeled.
"That’s a hard thing to do," he said, "but, in today’s climate, no one can simply say, ’we need more money’ without saying what the money is going to be used for."
In that, he agrees with the panel’s emphasis on high performance and accountability in its report. The committee wants to establish goals with benchmarks and measurements, including a standard cost per case handled, customer service studies, and complaint tracking. It also wants to create detailed job descriptions; measure managers and employees by efficiency, courtesy, and timing; establish employee and management reviews; create consequences for poor performance; and publish court rankings.
"Not one court is able to point to clearly defined benchmarks by which it measures itself on decision-making quality, efficiency, timeliness, and service," the report states. "There are almost no definitions of what a good job or a bad job looks like."
Courting Change
After visiting 14 courthouses, interviewing 165 court and community officials, and presenting a hefty set of recommendations, the Visiting Committee recognizes that reaching some kind of consensus among the three branches of government is paramount to bringing about any change.
"The committee realizes that the key to our recommendations will lie in their implementation," Monan said. "Our recommendations can only be implemented through the cooperative action of the judicial, legislative, and executive branches."
Mitchell, who commissioned the report, said she will review it with other Supreme Judicial Court justices in the coming weeks, while consulting with legislative leaders and pushing for implementation of managerial change as soon as possible.
For its part, the Mass. Bar Assoc. welcomed the report, while appointing its own task force to conduct Court Study 2003, a similar examination of the state’s judicial workings.
"We believe that, taken together, these reports will present the most complete assessment of our courts today and provide the most fair recommendations for the future," said Joseph P. J. Vrabel, MBA president.
Pelletier reminded BusinessWest, however, that positive steps have already been taken to improve efficiency in some areas. For example, district courts had traditionally tried civil cases involving less than $25,000 before a judge, but a losing plaintiff could then exercise his rights to a jury trial, doubling the resources and time needed to handle that case. To respond to that wastefulness, a program was instituted giving plaintiffs a six-member jury to begin with, immediately cutting down on long-term court costs.
"I think there have been some great strides made recently at the state level," Pelletier said, while recognizing the need to tackle larger budget issues. She worries, however, about how much can actually be done considering the state’s current budget crisis. "I’m sure the executive branch has been looking at these issues, but, unfortunately, the economics of the situation may cause it to go nowhere."
"There is an awful lot of waste, an awful lot of duplication," Rothschild said. "I don’t know how you get around it. You can’t turn government into a private business, but you can probably treat it more like a business than we do."
For his part, Stonefield said he agrees 100% with the panel’s assessment of the Judiciary’s problems. Even considering the challenge of creating consensus that now faces the state’s lawmakers, he called it a positive start. "Hopefully, out of this crisis will come a framework for a long-term commitment."
’Long-term’ might be the best choice of words to describe the mere process of enacting change. The job ahead is a daunting one, to be sure, but lawmakers and court officials may have the most detailed blueprint yet to begin restoring order in the courts.
These certainly haven’t been the best of times for the capital of Western Mass.
Indeed, just reading the newspaper these days can be a depressing exercise. Between reading about budget cuts, who’s been arraigned, and who’s not running for mayor, one might get the opinion that this city is paralyzed and devoid of hope.
It isn’t.
OK, maybe it is temporarily paralyzed while people in City Hall, the Mass. Career Development Institute, the Springfield Housing Authority, and just about every other agency in the city wait to see who gets indicted next. Meanwhile, the budget news isn’t good, and the general feeling that things will get worse before they get better is keeping many people out of the mayoral race.
But there’s no reason to give up hope.
As we’ve said many times, there are some good things happening in the Pioneer Valley, and especially Springfield. But right now, they’re being overshadowed by a war in Iraq, uproar over Gov. Romney’s various efforts to close the state’s budget gap, and a seemingly endless run of embarrassing stories about officials abusing their authority and wasting the taxpayers’ money. The latest allegations concerning Gerald Phillips and his management of the Mass. Career Development Institute are particularly disturbing.
And if it seems that many in City Hall and various economic development agencies are letting the events of the day not to mention the question of who will be the next mayor get in the way of progress Ö well, they probably are.
That’s why this is a time when the city desperately needs some leadership and we’re not talking about the next mayor. We’re talking about this one.
Mike Albano has done too much for the city over the past seven years to spend his last 11 months in office trying to keep anything else bad from happening which seems to be his MO right now. He has to pump some resolve into City Hall departments, especially those charged with economic development.
We know there’s a war and a recession on and neither of those are good for business but right now, it seems like economic development in this city is confined to waiting and hoping for someone to come along and develop the York Street Jail, the Gemini building, or the Technical High School property. That’s not economic development that’s crossing your fingers.
Now is the time when the city should be putting the next phase of riverfront development on the drawing board and looking ahead to the time when the war and the recession are over. Meanwhile, as we’ve said
before, some work needs to be done to make this city more business-friendly, and the planning department would be a good place to start. More often than not, roadblocks are put in the way of developers and would-be entrepreneurs, not ’welcome-to-Springfield’ signs.
While addressing economic development initiatives, Albano should also take the lead in efforts to restore confidence in the city. This is not a job that can wait for the next person to take over the corner office.
At the moment, Albano seems content to let the FBI do the digging and for his city solicitor to do the talking for his administration. Neither strategy inspires much confidence.
When Albano announced in early February that he would not be seeking a fifth term, we became worried not for him, but for the city.
Despite the mayor’s assertions to the contrary, lame ducks are not good for any community. And we’re not talking about any crusade against Romney’s budget plan and what it might do to cities and towns we’re talking about the day-to-day operation of Springfield.
Eleven months is too long a period to wait for the next leader of a city, too long a time to put things off until the next administration takes over, and much too long a stretch during which to operate in neutral and leave the hard decisions for the next person. Albano needs to act now to instill some enthusiasm in a city hall that is clearly in a funk. He also needs to know that his legacy is on the line and what he does before he departs could make all the difference.
Come next January or before that, if an employment opportunity should arise as many are predicting Albano will depart City Hall and try to convince people that he left the city better than he found it. For him to say that, he still has some work to do.
