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Critical Condition

Guy DiStefano

Guy DiStefano says the non-urgent procedures that were shut down in March typically support the rest of what hospitals do, leading to major revenue shortfalls this spring.

Back in March, when COVID-19 was just starting to crest, hospitals took steps to brace for a potential surge of patients. But while COVID-19 surged, revenues slowed to a trickle.

“Early on, we realized we needed to build capacity for a surge of patients so we didn’t get overwhelmed like they did in New York City, so we shut things down early in March — which blew a hole in everybody’s finances,” said Mark Keroack, president and CEO of Baystate Health. “We’ve been gradually returning to prior operations. We always remained open, of course, but it was only a week or two ago that we resumed more elective kinds of cases.”

Many hospitals are doing the same, but the overall losses to the state’s hospital industry are, as Keroack put it, “staggering” — expected to total between $5 billion and $6 billion by the end of the fiscal year on Sept. 30. “It’s a big stress test, if you will, for hospitals. And some have been hit more than others.”

All area hospitals have taken a financial blow.

“This has been very challenging, with the reduction in services,” said Guy DiStefano, vice president of Finance at Mercy Medical Center. “All our outpatient services — what are termed non-urgent cases, which usually help feed and support what a hospital does in its normal, day-to-day business — has been shorted, leaving us with a great revenue shortfall.”

At the same time, he added, “we still have all our expenses in place, just like any other business. Look at restaurants — the doors were closed, but they still had rent, utilities, all the other expenses, and the employees.”

Through May, Mercy saw a $25 million reduction in revenues due to pandemic-related reductions in services — and plummeting volume in the ER, a development that surprised hospital officials nationwide. At Mercy, daily Emergency Department cases dropped from a typical average of between 225 and 250 to around 100 to 120.

“Those slowly crept back up — we’re at 150 to 180 on a daily basis, so we’re not at full capacity, and there’s a lot of pent-up demand. Our business is coming back, but we lost a lot of revenues.”

“All our outpatient services — what are termed non-urgent cases, which usually help feed and support what a hospital does in its normal, day-to-day business — has been shorted, leaving us with a great revenue shortfall.”

Joanne Marqusee, president and CEO of Cooley Dickinson Hospital, said the hit has been significant. Through May, the facility recorded a loss of $18 million, partly due to COVID-related costs, but mostly because of lost volume. That number would be worse if not for $5.5 million in federal support.

“But that in no way covers our losses,” she added, noting that Cooley Dickinson Health Care could see a revenue shortfall of well above $30 million for the fiscal year ending on Sept. 30.

“We’re now planning for a fiscal-year 2021 budget and considering a number of measures to mitigate some of this — things like hiring freezes and reducing a lot of discretionary expenses. Everywhere we can hold off on spending, we have,” she went on, noting that service hours could be temporarily curtailed in some services, while employees making more than $26.50 per hour will forgo raises for the time being.

While that move shaves some costs while protecting lower-paid employees, it doesn’t make nearly enough of a dent, Marqusee noted. “So we’re looking at ways to further reduce expenses. But the work we’re doing already will certainly have an impact.”

DiStefano said Mercy has also had to take steps like furloughs and reducing hours to mitigate the losses. “We did everything we could to help employees keep their benefits in place. But employees are the number-one cost of a typical hospital — about 50% to 60% of the cost structure.”

Holyoke Medical Center has been losing roughly $6.5 million per month since services were curtailed back in March, President and CEO Spiros Hatiras said. But the community hospital did take some steps early on to gird against the damage.

“We were probably the first hospital in the area to furlough folks; we didn’t hold off because we saw it was absolutely important to be financially viable because we don’t have a parent company to spot us money,” he told BusinessWest, adding that many furloughed employees took advantage of the $600 federal boost in unemployment and wound up bringing in more than they did while working.

Joanne Marqusee says she hopes patient volume returns

Joanne Marqusee says she hopes patient volume returns not because of the revenue issue, but because patients shouldn’t forgo necessary care.

“That helped reduce expenses significantly,” he added, noting that almost 170 of 250 furloughed employees were back at the start of July, with another 80 to 90 expecting to return at month’s end. “Then MassHealth stepped in and allocated $11.8 million over four months to cover some of the losses, and we got a one-time payment from the feds of about $3 million. Add it all up, and through May, our losses were roughly $3 million — not insignificant, but we were able to survive it.”

Dollars and Sense

Baystate is surviving, too, Keroack said, emphasizing the importance the health system has not only on its 12,000 employees, but on the region, where it has an annual economic impact of some $4.2 billion.

When the fiscal year ends on Sept. 30, he expects Baystate to have lost about $160 million in revenues due to volume losses, but the system was able to secure about $75 million in federal relief and another $23 million state aid.

“The rest of that will likely be covered by reserves,” he added, noting that Baystate is fortunate to have both reserve funds and a broad service model.

“The smaller hospitals that have cash-flow problems got hit very hard because they didn’t have much in the way of reserves, but the other group is bigger hospitals that are highly specialized, like Mass General, where their revenues really depend on that elective surgical volume. Hospitals that are jacks of all trades and have good size, like Baystate, were hit less hard. Not to say it was pleasant what we’ve been through.”

Calling a $160 million revenue loss a ‘less hard’ hit may speak in some ways to the financial clout of the healthcare industry as a whole; it’s certainly one of the Commonwealth’s key economic drivers. And as patient volume continues to ramp back up, hospitals will be on safer ground when it comes to budgeting.

“At Baystate Medical Center, we’re at 80% to 90% capacity, so I would say people are mostly back.” Keroack said, noting that, while patients are returning gradually for routine care and procedures, current volume is still affected by social-distancing and sanitization measures that have slowed the pace of treatment. “In the community hospitals, they’re a bit further behind — more like 60% of former volume.

“In the long run, the question is, will volumes be permanently depressed?” he went on. “We’ve tried to convince people you really don’t want to put off stuff you know is worthwhile — you don’t want to ignore symptoms that might be serious. We have seen a number of people lately whose illness is much more serious than it would have been in pre-COVID days.”

Cooley Dickinson Hospital’s Emergency Department has seen a 100% increase from its COVID lows, during the height of the pandemic locally, when it was handling 35 to 45 patients per day. Now, ED providers are seeing 70 to 80 patients per day, which is still about 20% below the organization’s typical ED volume.

“We are seeing people with chronic illness who have waited too long to seek medical attention and are sick,” Emergency Department Nurse Director Sara McKeown said. “We have also seen an uptick in people seeking mental healthcare; patients presenting with substance-use issues and trauma are also increasing.”

Patient volume is bouncing back at Holyoke Medical Center and its community-based practices, but ED visits still lag, Hatiras said. “Anecdotally, we’ve heard of people putting off heart conditions and other things, and that can lead to bad outcomes. People shouldn’t stay home with serious conditions.”

That said, “I don’t blame the government for being overly cautious with closing down elective surgeries,” he added, noting that the elimination of many procedures over the past two months was, more than anything else, about preserving beds to treat an unpredictable pandemic.

“We’re now planning for a fiscal-year 2021 budget and considering a number of measures to mitigate some of this — things like hiring freezes and reducing a lot of discretionary expenses. Everywhere we can hold off on spending, we have.”

Now that the infection rate is being effectively controlled, he explained, hospitals are trying to communicate the message that they are safe places to visit — with plenty of strict protocols in place, from masking to social distancing to constant sanitizing — for patients who need to be seen.

DiStefano said the challenge has been ramping services back up — and bringing back furloughed workers — to match what is proving to be pent-up demand, but in a measured way. “It’s a delicate balance — how do we do this to best serve the community?”

It’s a long road back from the volume lows of the spring, when physician revenue dropped by 50. They’re now back around 65%, and inpatient beds are at about 80% of capacity. But people with serious health concerns should not put off care, he stressed, especially since the hospital has been diligent about infection protocols and keeping COVID-suspected patients separated from the rest.

“We take great pains to keep this environment safe,” he said. “The message to the community is, ‘if you are hurt, if you have a condition, this is a safe place to come.’” It helps, he added, to be affiliated with a larger system, Trinity Health, and while Mercy has rarely seen the kind of financial deficit it faced this spring, its leaders are still doing what they can to meet community health needs.

“We are the fabric of the community; there are no concerns about Mercy’s future,” DiStefano told BusinessWest. “We are going to be here for many years to come. Fortunately, we have the backing of a larger organization, and that helps a lot.”

Distance Learning

If there is an upside to navigating the pandemic, he said it might be the growing importance of telehealth, which became not just a convenient tool for providers and patients over the past few months, but a critical one — and one that seems to be on track to be covered by insurance payers in the future much more consistently than before.

“This has become more of a platform that allows us to reach out to patients,” said DiStefano, whose background in telemedicine goes back to the 1990s. “I hope it’s a bigger part of healthcare going forward. Obviously, you have to do some testing in the office, but you can do preliminary or follow-up appointments with telehealth, and that reduces the volume of patients in the waiting room and the physical office, which allows us to have a much cleaner, COVID-free environment to keep those people safe.”

In short, it’s a way to boost volume — and revenues — while making patients who do go to the hospital feel more secure.

Hatiras agreed. “We had to switch on the fly to do more telehealth, but what we saw was care being delivered even more efficiently,” he said. “We saw no-show rates completely drop. So it’s an effective way to provide care, and there will certainly be more pressure on insurers to reimburse appropriately for telehealth.”

Indeed, Marqusee added, “what has been stopping us from doing more telehealth has been reimbursement; I hope we never go back to the days when we were so underpaid for telehealth. It has been a terrific model.”

In the meantime, she sees volume slowly returning to Cooley Dickinson — perhaps reaching 90% of a typical season come October. “But the reason we welcome those numbers is because people need to get care — it’s not because we need the volume. We know from national studies and anecdotally that people have been afraid, and they’re forgoing care, and that can really have health impacts for people.”

That’s why her facility, like the others BusinessWest spoke with, is not only maintaining strict protocols around infection control, but is communicating what it’s doing with the community.

“People have to believe that and feel confident. It’s really important that people don’t stay home in pain with issues that will just get worse. People aren’t coming with heart attacks, or appendicitis, or they power through a head injury, and it turns out they had a brain bleed. People need to come for care, and they should know this is a place they can come and feel comfortable.”

Not so comfortable, however, that they neglect the behaviors that have reduced infection rates in Western Mass. and allowed hospitals to increase their non-COVID-19 services.

“We’re in a good place; there isn’t a high level of COVID in our community. But that can change quickly,” Marqusee said. “I want people to always remember the reason we have low levels of COVID is because of the efforts everyone is making to social distance, wear masks, and practice hand hygiene. We shouldn’t take the reopening as a sign they we don’t need to do those things, but to do it even more. That allows us to provide needed care to all our communities.”

Keroack says he expects some patients to enthusiastically return to care providers, while others will be stragglers who need more convincing — while others will continue to embrace telehealth as the best option.

“We may not return to our former volumes until we have a vaccine and everyone feels totally comfortable,” he told BusinessWest. “I think it’s going to be a process.”

Joseph Bednar can be reached at [email protected]

Economic Outlook

Higher Ground

Scott Foster says small cannabis businesses are being assailed with offers from large, out-of-state players.

The cannabis industry is in full swing in Massachusetts, with about three dozen dispensaries currently selling products for recreational and medicinal use — about a third of them in Western Mass. — not to mention cultivators, product developers, and a host of other related enterprises.

With 17% of cannabis sales going back to the state as taxes, and communities collecting at least 3% more — usually higher — it’s easy to recognize the financial impact.

But Scott Foster says said it’s important to remember the jobs being generated.

“You can get good employment in this field. A shop might have 20-plus employees working there,” said Foster, a partner at Bulkley Richardson, the Springfield-based law firm that launched a specialty cannabis practice last year to provide guidance for individuals, companies, and municipalities entering this very young industry. “These aren’t small businesses in the sense of 200 or 300 employees, but it’s not just four or five people working, either. It’s a pretty steady base of employment.”

And it adds up, said Jeff Hayden, vice president of Business and Community Services at Holyoke Community College (HCC), which recently launched a Cannabis Education Center to provide needed training and resources for people who want to enter this burgeoning industry.

“In Holyoke, 13 companies have applied for 21 different licenses,” Hayden told BusinessWest. “At present, 50 to 75 people are employed in cannabis-related businesses in Holyoke, but the anticipation is, within a year or two, that will be in the range of 400 to 500 people. It’s potentially a significant occupational opportunity for people. And if Holyoke is looking at 400 to 500, what is Springfield looking at? What about Northampton, Easthampton, Chicopee?”

This career potential is what inspired HCC to partner with the Worcester-based Cannabis Community Care and Research Network (C3RN) on the Cannabis Education Center.

“In Holyoke, 13 companies have applied for 21 different licenses. At present, 50 to 75 people are employed in cannabis-related businesses in Holyoke, but the anticipation is, within a year or two, that will be in the range of 400 to 500 people.”

“At HCC, we focus on what kinds of job skills people need in order to get jobs, whether entry-level or skills to do their job better. The fact that there is so much potential in this new industry in Massachusetts piqued my interest.”

No economic outlook is complete without touching on the early expansion of the cannabis industry in Massachusetts — and its immense promise for further growth, especially as dozens more shops plan to open their doors in 2020. Whether they’ll be able to maintain the sector’s early momentum remains to be seen — but most analysts agree the potential is certainly there.

On Fire

Foster recently came across an article that listed cannabis among the top four new legal practice areas, among heavyweights like cybersecurity.

“It’s interesting that cannabis has become a front-and-center legal issue across all the U.S., not just Massachusetts,” he said. “It’s becoming more recognized as a legitimate industry. Even though federal law hasn’t changed, it seems to be moving in that direction.”

Indeed, with Illinois joining the list this month, 11 states have now legalized recreational marijuana, and 19 others allow medicinal marijuana. With others set to follow this year, it’s not hard to imagine an eventual shift at the federal level, even if that doesn’t appear imminent.

As one step in that direction, the U.S. House of Representatives passed a bill in 2019 allowing banks to handle marijuana accounts; currently, most cannabis businesses are all-cash enterprises since they can’t use banks.

“Will banks ever start lending to the industry?” Foster asked. “I think yes, but most people in the industry think it probably won’t be in 2020. Maybe, but probably not. They’re expecting it to stall in the Senate, and Washington is occupied at the moment with lots of other stuff.”

For now, communities that have embraced this new world — like Holyoke, which is starting to fill its former mills along the canals with a mix of cannabis-related businesses — appreciate the additional tax revenue and retail traffic in town, but also, as Hayden notes, those jobs.

“Will cannabis provide thousands of jobs, like the state has predicted? Who knows, but 300, 400, 500 new jobs is significant,” he said. “More than 90% of the businesses in the Valley are small businesses — not by the definition of the Small Business Association, with 500 employees or fewer, but with 50 or fewer.”

Collectively, that’s a lot of positions to fill, especially as more of those small businesses come online.

“This is like any other business in the sense that they need people ready to work and have some skills to do the jobs they want to hire for,” Hayden said. “The more we can work as a community college on skills training that gets people ready for work, the better.”

In many cases, shops are hiring people who may face skill barriers to other types of employment; it’s a relatively even playing field in that, because the industry is so new, almost everyone needs training. HCC’s Cannabis Education Center is doing its part, both through courses and one-day programs like an upcoming workshop series on planning and starting a cannabis business, as well as getting into medical marijuana.

“Our goal is to get people into jobs, but in the context of a career,” Hayden said. “A job is a great thing, but if it’s just a 15- or 20-hour job, that’s not going to support you or your family for long. We want to get people on a career pathway through skills training.”

For example, he went on, “in cultivation, someone might come in trimming plants, working with growers, learning what the process is, and might become a cultivation technician, an assistant grower, even a master grower. There are definitely steps along the way to get not just a job, but a career in cannabis.”

Maturing Industry

Foster said he doesn’t have a crystal ball when it comes to the cannabis industry, but he does have his eye on some intriguing trends.

“We’re already seeing consolidation. Many of our clients are receiving unsolicited offers to buy them out. They’re not actively soliciting offers; people are contacting them. It’s mostly out-of-state money — and it’s not small money. That will be interesting to see, if the industry changes from being completely locally owned to being owned by out-of-state players, creating national cannabis businesses.”

Another murky area right now is the effectiveness of the state’s social-equity piece, which aims to provide priority access, training, and technical assistance to individuals and communities negatively affected by the drug war — a key target audience for HCC’s training efforts. “That’s another big unknown which may get some clarity in 2020,” Foster said.

What is clear is that the market, as it stands now, is humming along — and creating those jobs.

“All the folks I’m seeing are still trying to keep up with customer demand. At least from what I’m hearing, competition hasn’t slowed business. Will that change if New York and Connecticut were to legalize? Possibly,” he noted, citing casinos as a case study; there’s no doubt Foxwoods and Mohegan Sun have lost some business to their northern neighbor since the Bay State got into that business. “But for the moment, Massachusetts is the only game in town when it comes to cannabis.”

It’s a game with lofty goals and an uncertain — but undoubtedly promising — future.

“It’s a maturing industry,” Foster said. “So it’s going to have maturing-industry challenges.”

Joseph Bednar can be reached at [email protected]

Super 60

Recognition Program Marks 30 Years with Oct. 25 Event

Now in its 30th year, the Springfield Regional Chamber’s Super 60 program celebrates the success of the fastest-growing privately-owned businesses in the region. Businesses on the Total Revenue and Revenue Growth categories for 2019 represent all sectors of the economy, including nonprofits, transportation, healthcare, technology, manufacturing, retail, and hospitality. Some have been named to the Super 60 once or many times before, and some are brand-new to the list.

This year’s Super 60 Celebration event will take place on Friday, Oct. 25 from 11:30 a.m. to 1:30 p.m. at Chez Josef in Agawam. Sheila Coon, founder of Hot Oven Cookies, will be the keynote speaker at the event, which is presented by Health New England and sponsored by People’s United Bank, Wells Fargo Bank, the Republican, MassHire Hampden County Workforce Board, and Zasco Productions.

Hot Oven Cookies began in 2015, when Coon started baking cookies for her children while she was in culinary school. She started her business as a cookie-delivery service. With business education from Valley Venture Mentors and SPARK EforAll in Holyoke, the delivery business expanded to a food truck, from which Coon began selling cookies from her repertoire of more than 100 recipes, inspired by her children, at farmers’ markets and other events. When her food truck constantly sold out of cookies, Coon knew there was potential for more.

Coon is also a graduate of the first cohort of RiseUp Springfield, a seven-month, intensive, hands-on program for established and small business owners, powered by Interise’s StreetWise ‘MBA’ curriculum in collaboration with the city of Springfield, the Assoc. of Black Business & Professionals, and the Springfield Regional Chamber.

In just four short years, Coon has found sweet success with Hot Oven Cookies. In 2018, she and her husband, David, opened the brand’s first retail location at 1597 Main St. in Springfield. She has plans to open a production facility in Agawam to accommodate her current business as well as plans for a wholesale business and an online store with national shipping of Hot Oven’s uncooked frozen cookie dough.

“Hot Oven Cookies is an example of a true entrepreneurial story about how an idea, a passion, or a hobby can become a thriving business with dedication and taking advantage of the small-business resources available in Western Massachusetts,” said Nancy Creed, president of the Springfield Regional Chamber. “We are thrilled to have a graduate of the first cohort of RiseUp Springfield take the stage at Super 60 to share her success story.”

The event costs $60 for chamber members and $75 for general admission. Reservations may be made for tables of eight or 10. The deadline for reservations is Wednesday, Oct. 16. No cancellations are accepted after that date, and no walk-ins will be allowed. Reservations must be made online at www.springfieldregionalchamber.com or by e-mailing [email protected]

Total Revenue:

1. Whalley Computer Associates Inc.*
2. Marcotte Ford Sales Inc.
3. Tighe & Bond*
Arrow Security Co. Inc.
Baltazar Contractors
Bob Pion Buick GMC Inc.
Center Square Grill (Fun Dining Inc.)
Charter Oak Financial
Commercial Distributing Co. Inc.
Con-Test Analytical Laboratory (Filli, LLC)
Court Square Group Inc.
David R. Northup Electrical Contractors Inc.
The Dowd Agencies, LLC
E.F. Corcoran Plumbing & Heating Co. Inc.*
Freedom Credit Union
Governors America Corp. / GAC Management Co.*
Haluch Water Contracting Inc.
Holyoke Pediatrics Associates, LLP
JET Industries Inc.
Kittredge Equipment Co. Inc.
Lancer Transportation / Sulco Warehousing & Logistics
Louis and Clark Drug Inc.
Maybury Associates Inc.*
Paragus Strategic IT
Rediker Software Inc.
Rock Valley Tool, LLC
Skip’s Outdoor Accents Inc.
Tiger Press (Shafii’s Inc.)
Troy Industries Inc.
United Personnel Services Inc.

Revenue Growth:

1. The Nunes Companies Inc.
2. Brewmasters Brewing Services, LLC
3. Christopher Heights of Northampton
A.G. Miller Co. Inc.
Adam Quenneville Roofing & Siding Inc.*
American Pest Solutions Inc.
Baystate Crushing and Recycling Inc.
Burgess, Schultz & Robb, P.C.
City Enterprise Inc.*
Courier Express Inc.
EOS Approach, LLC / Proshred Security International
Gallagher Real Estate
GMH Fence Company Inc.
Goss & McLain Insurance Agency Inc.
Greenough Packaging & Maintenance Supplies Inc.
Kenney Masonry, LLC
Knight Machine Tool Company Inc.
L & L Property Service, LLC
Ludlow Heating and Cooling Inc.
Michael’s Party Rentals Inc.
Oasis Shower Doors (EG Partners, LLC)*
Pioneer Valley Financial Group, LLC
R.R. Leduc Corp.*
Sanderson MacLeod Inc.
Springfield Thunderbirds (Springfield Hockey, LLC)
Summit Careers Inc.
United Industrial Textile Products Inc.
Villa Rose Restaurant (Tavares and Branco Enterprises Inc.)
Webber & Grinnell Insurance Agency Inc.*
Westside Finishing Co. Inc.*

*Qualified in both categories

Total Revenue​

1. Whalley Computer Associates Inc.*
One Whalley Way, Southwick
(413) 569-4200
www.wca.com
John Whalley, President
WCA is a locally owned family business that has evolved from a hardware resale and service group in the ’70s and ’80s into a company that now focuses on lowering the total cost of technology and productivity enhancement for its customers.

2. Marcotte Ford Sales Inc.
1025 Main St., Holyoke
(413) 536-1900
www.marcotteford.com
Bryan Marcotte, President
The dealership sells new Ford vehicles as well as pre-owned cars, trucks, and SUVs, and features a full service department. Marcotte has achieved Ford’s President’s Award multiple occasions over the past decade. It also operates the Marcotte Commercial Truck Center.

3. Tighe & Bond*
53 Southampton Road, Westfield
(413) 562-1600
www.tighebond.com
Robert Belitz, President and CEO
Tighe & Bond is a full-service engineering and environmental consulting firm offering myriad services, including building engineering, coastal and waterfront solutions, environmental consulting, GIS and asset management, site planning and design, transportation engineering, and water and wastewater engineering.

Arrow Security Co. Inc
124 Progress Ave., Springfield
(413) 732-6787
www.arrowsecurity.com
John Debarge Jr., President
This company provides security for all types of clients and issues, including industrial plant security, patrol services with security checks for homeowners, free security surveys, and more provided by a management team that consists of a diverse group of professionals with law enforcement, private-sector security, and military backgrounds.

Baltazar Contractors
83 Carmelinas Circle, Ludlow
(413) 583-6160
www.baltazarcontractors.com
Frank Baltazar, President
Baltazar Contractors is a family-owned construction firm specializing in roadway construction and reconstruction; all aspects of site-development work; sewer, water, storm, and utilities; and streetscape improvements in Massachusetts and Connecticut.

Bob Pion Buick GMC Inc.
333 Memorial Dr., Chicopee
(413) 206-9251
www.bobpionbuickgmc.com
Rob Pion, General Manager
Bob Pion Buick GMC carries a wide selection of new and pre-owned cars, crossovers, and SUVs, and also offers competitive lease specials and a full service department.

Center Square Grill (Fun Dining Inc.)
84 Center Square, East Longmeadow
(413) 525-0055
www.centersquaregrill.com
Michael Sakey, Bill Collins, Proprietors
Center Square Grill serves traditional American food, with hints of classically prepared French sauces, Latin-inspired fish dishes, and standard Italian repertoire. The facility also has a catering service and hosts events of all kinds.

Charter Oak Financial
330 Whitney Ave., Holyoke
(413) 539-2000
www.charteroakfinancial.com
brendan naughton, general agent
Charter Oak’s services include risk management (including life insurance, disability income insurance, and long-term-care insurance), business planning and protection, retirement planning and investments, and fee-based financial planning.

Commercial Distributing Co. Inc.
46 South Broad St., Westfield
(413) 562-9691
www.commercialdist.com
Richard Placek, Chairman
Commercial Distributing Co. is a family-owned business servicing more than 1,000 bars, restaurants, and clubs, as well as more than 400 package and liquor stores. Now in its third generation, the company continues to grow by building brands and offering new products as the market changes.

Con-Test Analytical Laboratory (Filli, LLC)
39 Spruce St., East Longmeadow
(413) 525-2332
www.contestlabs.com
Tom Veratti, Founder and Consultant
Con-Test Inc. provides industrial-hygiene and analytical services to a broad range of clients. Originally focused on industrial-hygiene analysis, the laboratory-testing division has expanded its capabilities to include numerous techniques in air analysis, classical (wet) chemistry, metals, and organics.

Court Square Group Inc.
1350 Main St., Springfield
(413) 746-0054
www.courtsquaregroup.com
Keith Parent, President
Court Square is a leading managed-services company that provides an audit-ready, compliant cloud (ARCC) infrastructure for its clients and partners in the life-sciences industry.

David R. Northup Electrical Contractors Inc.
73 Bowles Road, Agawam
(413) 786-8930
www.northupelectric.com
David Northup, President
This is a family-owned, full-service electrical, HVAC, and plumbing contractor that specializes in everything from installation and replacement to preventive maintenance, indoor air-quality work, and sheet-metal fabrication.

The Dowd Agencies, LLC
14 Bobola Road, Holyoke
(413) 538-7444
www.dowd.com
John Dowd, President and CEO
The Dowd Agencies is the oldest insurance agency under continuous family ownership, and one of the most long-standing, experienced insurance agencies in Massachusetts.

E.F. Corcoran Plumbing & Heating Co. Inc.*
5 Rose Place, Springfield
(413) 732-1462
www.efcorcoran.com
Charles Edwards and Brian Toomey, Co-owners
E.F. Corcoran is a full-service plumbing and HVAC contractor. Services include 24-hour plumbing service, HVAC system installs, design-build services, energy retrofits, system replacements and modifications, gas piping, boilers, and more.
Freedom Credit Union
1976 Main St., Springfield
(800) 831-0160
www.freedom.coop
Glenn Welch, President and CEO
Freedom is a full-service credit union serving a wide range of business and consumer clients. Freedom has its main office on Main Street in Springfield, with other offices in Sixteen Acres, Feeding Hills, Ludlow, Chicopee, Easthampton, Northampton, Turners Falls, Greenfield, and Roger L. Putnam Vocational Technical Academy.

Governors America Corp. / GAC Management Co.*
720 Silver St., Agawam
(413) 786-5600
www.governors-america.com
Sean Collins, President
GAC is a leading provider of engine-governing and system controls to a worldwide list of equipment manufacturers and power providers. The engine-control products are used in a wide range of industries, including generator set, material handling, marine propulsion, mining, locomotive, and off-highway applications.

Haluch Water Contracting Inc.
399 Fuller St., Ludlow
(413) 589-1254
Thomas Haluch, President
Haluch Water Contracting’s main lines of business include sewer contracting, underground utilities, and water-main construction.

Holyoke Pediatrics Associates, LLP
150 Lower Westfield Road, Holyoke
(413) 536-2393
www.holyokepediatrics.com
Kathy Tremble, Adair Medina, Care Coordinators
HPA is the largest pediatric practice in Western Mass., providing primary-care services as well as lactation counseling, behavioral-health services, and patient education. HPA has a medical laboratory drawing site and also provides in-hospital support for new mothers.

JET Industries Inc.
307 Silver St., Agawam
(413) 786-2010
Michael Turrini, President
Jet Industries manufactures aircraft engines, parts, and equipment, as well as turbines and turbine generator sets and parts, aircraft power systems, flight instrumentation, and aircraft landing and braking systems.

Kittredge Equipment Co. Inc.
100 Bowles Road, Agawam
(413) 304-4100
www.kittredgeequipment.com
Wendy Webber, President
Kittridge Equipment is a $57 million equipment and supply giant. It boasts 70,000 square feet of inventory and warehouse, handles design services, and has designed everything from small restaurants to country clubs to in-plant cafeterias.

Lancer Transportation & Logistics / Sulco Warehousing & Logistics
311 Industry Ave., Springfield
(413) 739-4880
www.sulco-lancer.com
Todd Goodrich, President
Sulco Warehousing & Logistics operates a network of distribution centers. Lancer Transportation & Logistics is a DOT-registered contract motor carrier providing regional, national, and international truckload and LTL delivery services.

Louis and Clark Drug Inc.
309 East St. Springfield
(413) 737-2996
www.lcdrug.com
Skip Matthews, President
Louis & Clark provides prescriptions for individuals and institutions and helps those who need home medical equipment and supplies. The company also provides professional pharmacy and compounding services, medical equipment, independent-living services, and healthcare programs.
Maybury Associates Inc.*
90 Denslow Road, East Longmeadow
(888) 629-2879
www.maybury.com
John Maybury, President
Maybury Associates has more than 80 employees and is a distributor for about 1,300 manufacturers. The company designs, supplies, and services a wide variety of handling equipment throughout New England, and provides customers in a wide range of industries with solutions to move, lift, and store their parts and products.
Paragus Strategic IT*
112 Russell St., Hadley
(413) 587-2666
www.paragusit.com
Delcie Bean IV, President
Paragus has grown dramatically as an outsourced IT solution, providing business computer service, computer consulting, information-technology support, and other services to businesses of all sizes.

Rediker Software Inc.
2 Wilbraham Road, Hampden
(800) 213-9860
www.rediker.com
Andrew Anderlonis, President
Rediker Software has been providing school administrative software solutions for more than 35 years. Rediker Software is used by school administrators across the U.S. and in more than 100 countries, and is designed to meet the student-information-management needs of all types of schools and districts.

Rock Valley Tool, LLC
54 O’Neil St., Easthampton
(413) 527-2350
www.rockvalleytool.com
Elizabeth Paquette, President
Rock Valley Tool is a precision-machining facility housing both CNC and conventional machining equipment, along with a state-of-the-art inspection lab. With more than 40 years of experience, the company provides manufactured parts to customers in the aerospace, commercial/industrial, and plastic blow-molding industries.

Skip’s Outdoor Accents Inc.
1265 Suffield St., Agawam
(413) 786-0990
www.skipsonline.com
John and Scott Ansart, Owners
Skip’s Outdoor Accents specializes in a wide range of outdoor products, including storage sheds, gazebos, swingsets, and outdoor furniture, offering installation and delivery to sites with limited or no access. Skip’s shed and gazebo delivery is free to most of Massachusetts, Connecticut, and Rhode Island.

Tiger Press (Shafii’s Inc.)
50 Industrial Ave., East Longmeadow
(413) 224-2100
www.tigerpress.com
Reza Shafii, Jennifer Shafii, Owners
TigerPress is a sustainable, eco-friendly printer, using green technology and operating in a 100,000-square-foot manufacturing plant. The company offers digital printing, commercial printing, and custom package printing all under one roof.

Troy Industries Inc.
151 Capital Dr., West Springfield
(866) 788-6412
www.troyind.com
Steve Troy, CEO
Troy Industries is an industry leader that designs and manufactures innovative, top-quality small arms components and accessories and complete weapon upgrades. All products are American-made and designed to perform flawlessly under intense battle conditions.

United Personnel Services Inc.
289 Bridge St., Springfield
(413) 736-0800
www.unitedpersonnel.com
Tricia Canavan, President
United provides a full range of staffing services, including temporary staffing and full-time placement, on-site project management, and strategic recruitment in the Springfield, Hartford, and Northampton areas, specializing in administrative, professional, medical, and light-industrial staff.

Revenue Growth

1. The Nunes Companies Inc.
658 Center St., Ludlow
(413) 308-4940
www.nunescompanies.com
Armando Nunes, President
The Nunes Companies offers services such as sitework, road construction, and roll-off dumpster rentals, relying on leadership, quality, and cutting-edge technology to get the job done.

2. Brewmasters
Brewing Services, LLC
4 Main St., Williamsburg
(413) 268-2199
Dennis Bates, Michael Charpentier, Owners
Brewmasters Brewing Services is a small craft brewery offering a wide variety of services, including contract brewing and distilling.

3. Christopher Heights
of Northampton
50 Village Hill Road, Northampton
(413) 584-0701
www.christopherheights.com
michael taylor, executive director
Christopher Heights is a mixed-use community located in a natural setting that features scenic mountain views and walking paths. Residents and staff each bring their own experiences and talents, which are recognized and often incorporated into social activities and programs.

A.G. Miller Co. Inc.
53 Batavia St., Springfield
(413) 732-9297
www.agmiller.com
Rick Miller, President
A leader in the metal-fabricating industry, the company’s services include precision metal fabrication; design and engineering; assembly; forming, rolling, and bending; laser cutting; punching; precision saw cutting; welding; powder coating; and liquid painting.

Adam Quenneville Roofing & Siding Inc.*
160 Old Lyman Road, South Hadley
(413) 536-5955
www.1800newroof.net
Adam Quenneville, CEO
Adam Quenneville offers a wide range of residential and commercial services, including new roofs, retrofitting, roof repair, roof cleaning, vinyl siding, replacement windows, and the no-clog Gutter Shutter system. The company has earned the BBB Torch Award for trust, performance, and integrity.

American Pest Solutions Inc.
169 William St., Springfield
(413) 781-0044
www.413pestfree.com
Bob Russell, President
American Pest Solutions is a full-service pest-solutions company founded in 1913. With two locations, the company serves residential and commercial customers, offering inspection, treatment, and ongoing protection.

Baystate Crushing and Recycling Inc.
36 Carmelinas Circle, Ludlow
(413) 583-4440
www.baystateblasting.com
Paul Baltazar, President
Baystate Blasting Inc. is a family-owned drilling and blasting firm that provides a full range of rock-blasting and rock-crushing services, including sitework, heavy highway construction, residential work, quarry, and portable crushing and recycling. An ATF-licensed dealer of explosives, it offers rental of individual magazines.

Burgess, Schultz & Robb, P.C.
200 North Main St., South Building,
Suite 1, East Longmeadow
(413) 525-0025
www.bsrcpa.com
Andrew Robb, Managing Partner
Burgess, Schultz & Robb, P.C. is a professional certified public accounting firm providing audit, tax, business-advisory, and business-management services to private businesses, trusts, tax-exempt organizations, and individuals.
City Enterprise Inc.*
52-60 Berkshire Ave., Springfield
(413) 726-9549
www.cityenterpriseinc.com
Wonderlyn Murphy, President
City Enterprises Inc. is a general contractor with a diverse portfolio of clients, including the Groton Naval submarine base, Westover Air Reserve Base, the Federal Aviation Administration, the National Park Service, the Army Corps of Engineers, and many others.

Courier Express Inc.
111 Carando Dr., Springfield
(413) 730-6620
www.courierexp.com
Eric Devine, President
Courier Express is committed to providing custom, same-day delivery solutions for any shipment and a courteous, prompt, and professional delivery agent. The company ships everything from a single envelope to multiple pallets.

EOS Approach, LLC / Proshred Security International
75 Post Office Park, Wilbraham
(413) 596-5479
www.proshred.com
Joe Kelly, Owner
Proshred specializes in the secure, on-site information destruction of confidential and sensitive documents, computer hard drives, and electronic media. It is an ISO 9001:2008 certified and NAID AAA certified mobile shredding company.
Gallagher Real Estate
1763 Northampton St., Holyoke
(413) 536-7232
www.gogallagher.com
Paul Gallagher, Owner
Gallagher Real Estate is an independent brokerage that operates in Hampshire and Hampden counties in Massachusetts and Hartford County in Connecticut. The company specializes in both residential and commercial properties and has offices in Holyoke, South Hadley, East Longmeadow, and Springfield.

GMH Fence Co. Inc.
15 Benton Dr., East Longmeadow
(413) 525-3361
www.gmhfence.com
Glenn Hastie, Owner
GMH Fence Co. is one of the largest fence companies in the region, offering fence installations from a selection of wood, aluminum, steel, and vinyl fencing for residential and commercial customers.

Goss & McLain Insurance Agency Inc.
1767 Northampton St., Holyoke
(413) 534-7355
www.gossmclain.com
Deborah Buckley, President
Goss & McLain is an independent insurance agency offering a diverse portfolio of personal and business property and liability insurance, as well as life and health insurance. It also insures homes, cars, and businesses and protects against personal and business liabilities.
Greenough Packaging & Maintenance Supplies Inc.
54 Heywood Ave., West Springfield
(800) 273-2308
www.greenosupply.com
Craig Cassanelli, President
Greenough is a distributor of shipping, packaging, safety, breakroom, janitorial, cleaning, and facility-maintenance supplies. It also offers custom solutions to customers, such as printed bags, cups, and napkins, as well as custom packaging, including printed tape, boxes, stretch wrap, and strapping.

Kenney Masonry, LLC
P.O. Box 2506, Amherst
(413) 256-0400
www.kenneymasonry.com
Sarahbeth Kenney, Owner
Kenney Masonry is a family-owned company with more than 150 years of combined construction experience working with brick, block, stone, and concrete on commercial, institutional, public, and residential projects.

Knight Machine Tool Company Inc.
11 Industrial Dr., South Hadley
(413) 532-2507
Gary O’Brien, Owner
Knight Machine & Tool Co. is a metalworking and welding company that offers blacksmithing, metal roofing, and other services from its 11,000-square-foot facility.

L & L Property Service, LLC
582 Amostown Road, West Springfield
(413) 732-2739
Richard Lapinski, Owner
L & L Property Services is a locally owned company providing an array of property services, including lawn care, snow removal, sanding, excavations, patios and stone walls, hydroseeding, and more.

Ludlow Heating and Cooling Inc.
1056 Center St., Ludlow
(413) 583-6923
www.ludlowheatingandcooling.com
Karen Sheehan, President
Ludlow Heating & Cooling is a full-service energy company dedicated to providing quality heating and cooling product services including new system installation, oil heat delivery, and maintenance to an existing system.

Michael’s Party Rentals Inc.
1221 South Main St., Palmer
(413) 589-7368
www.michaelspartyrentals.com
Michael Linton, Owner
Michael’s Party Rentals operates year-round, seven days a week. Its 9,000-square-foot warehouse holds more than 100 tents of all sizes, tables, chairs, dance flooring, staging, lighting, and an extensive array of rental equipment for any type of party.

Oasis Shower Doors
(EG Partners, LLC)*
646 Springfield St., Feeding Hills
(800) 876-8420
www.oasisshowerdoors.com
Thomas Daly, Owner
Oasis is New England’s largest designer, fabricator, and installer of custom frameless glass shower enclosures and specialty glass, offering a wide array of interior glass entry systems and storefronts, sliding and fixed glass partition walls, back-painted glass, and switchable privacy glass for bedrooms, offices, and conference rooms.

Pioneer Valley
Financial Group, LLC
1252 Elm St., Suite 28, West Springfield
(413) 363-9265
www.pvfinancial.com
Joseph Leonczyk, Charles Myers, Senior Partners
PV Financial helps clients pursue their goals through careful financial planning and sound investment strategy. Services include retirement planning, asset growth, business planning, college funding, estate planning, and risk management.

R.R. Leduc Corp.*
100 Bobala Road, Holyoke
(413) 536-4329
www.rrleduc.com
Robert LeDuc, President
Since its inception in 1967, the R.R. Leduc Corp. has been a family-owned business that specializes in precision sheet metal and custom powder coatings. The company produces a variety of products for the communication, military, medical, electronics, and commercial industries.

Sanderson MacLeod Inc.
1199 South Main St., Palmer
(413) 283-3481
www.sandersonmacleod.com
Mark Borsari, President
From breakthrough brush innovation projects to supply-chain integration, Sanderson MacLeod leverages its experience and know-how in ways that produce high-quality twisted-wire brushes for its customers.

Springfield Thunderbirds (Springfield Hockey, LLC)
45 Bruce Landon Way, Springfield
(413) 739-4625
www.springfieldthunderbirds.com
Nathan Costa, President
The Springfield Thunderbirds are a professional ice hockey team and the AHL affiliate of the NHL’s Florida Panthers. Since the team began to play in the area in 2016, it has formed the T-Birds Foundation, a 501(c)(3) public charity that benefits causes in Springfield and surrounding Pioneer Valley communities.
Summit Careers Inc.
85 Mill St., Suite B, Springfield
(413) 733-9506
www.summitcareers.inc
Bryan Picard, Owner
Summit Careers is a full-service staffing and recruiting firm that provides temporary, temp-to-hire, and direct-hire services for clients in a variety of sectors, including light industrial, warehouse, professional trades, administrative, accounting, and executive.

United Industrial Textile Products Inc.
321 Main St., West Springfield
(413) 737-0095
www.uitprod.com
Wayne Perry, President
UIT is a family-owned manufacturer that has been making high-quality covers for commercial, military, and industrial applications for more than 60 years. Craftsmen at the company specialize in the creation of custom covers that are manufactured to each client’s unique specifications.

Villa Rose Restaurant (Tavares and Branco Enterprises Inc.)
1428 Center St., Ludlow
(413) 547-6667
www.villaroserestaurant.com
Tony Tavares, Owner
Nestled across from the Ludlow reservoir, the Villa Rose offers fine dining in a relaxed and intimate atmosphere. The restaurant offers a private room with availability for weddings, receptions, showers, anniversaries, and any other banquet function from 30 to 175 people.

Webber & Grinnell
Insurance Agency Inc.*
8 North King St., Northampton
(413) 586-0111
www.webberandgrinnell.com
Bill Grinnell, President
Webber and Grinnell has provided insurance protection for thousands of individuals and businesses throughout the Pioneer Valley for more than 150 years. The agency is balanced between business insurance, personal insurance, and employee benefits.

Westside Finishing Co. Inc.*
15 Samosett St., Holyoke
(413) 533-4909
www.wsfinish.com
Brian Bell, President
Westside Finishing is a family-owned business specializing in a wide array of services, including pre-treatment/cleaning, conveyorized powder coating, batch powder coating, silk screening, pad printing, masking, packaging, and trucking.

Accounting and Tax Planning

Recording Revenue

By Rebecca Connolly

Recording revenue is, in anyone’s mind, seen as a job well done when you complete selling your product or service or receiving a donation for your organization.

But a new revenue-recognition standard for non-public companies is effective for years ending Dec. 31, 2019 and annual periods then after, and business owners and managers must be aware of what this new standard means.

The new revenue-recognition standard, Accounting Standards Codification 605, Revenue Recognition, created a five-step process to determine when you should recognize revenue.

• Step 1: Identify a contract with a customer. This contract can include an invoice, a formal signed contract, and other various forms agreed to upon the purchase of goods or services. Once a contract has been identified, you proceed to step 2.

“Know what you are signing and know, if you are entering into a long-term contract, how to structure it in accordance with generally accepted accounting principles.”

• Step 2: Identify the performance obligations (promises) in the contract. Contracts can have one or more performance obligations. An example of one performance obligation is to deliver the 10 office chairs that were ordered by a customer. An example of multiple performance obligations within a contract is a construction contract that requires a house to be built and suitable for living, a driveway to be installed, and a garage to be constructed. The key item here is to know what you are signing and know, if you are entering into a long-term contract, how to structure it in accordance with generally accepted accounting principles. Then you proceed to step 3.

• Step 3: Determine the transaction price. Transaction price is the amount of consideration the entity expects to be entitled to, in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. This item concerns how much money the entity expects to receive. As one example, if you sell office chairs for $59 a chair, but there is a sale and the chairs are now $45 a chair, then the revenue the entity can expect to receive for the chair at this time is $45 a chair. Elements from step 2 and step 3 are then used in step 4.

• Step 4: Allocate the transaction price to the performance obligation in the contract. If there is only one performance obligation of the office- chair delivery, then no allocation is needed. It gets complicated when you have more than one performance obligation in a contract. The best method is to allocate the price per performance obligation in the contract itself. Continuing the example of the construction of a house, the price could be allocated at $200,000 and the garage and driveway obligation could potentially be allocated at $100,000. An important element here is to be consistent in your application of the price allocations and document your process with the allocation among performance obligations. Once prices are allocated, you can proceed to step 5.

• Step 5: Recognize revenue when (or as) the reporting organization satisfies a performance obligation. Recognizing the revenue in the amount determined in step 4 has become more of a checklist item, as, yes, we have completed the performance obligation, and now the revenue can be recorded. This step is ‘I have delivered the office chairs and have completed the performance obligation with this contract.’

Conclusion

The moral of the new revenue-recognition standard is that the rules are changing, and it is best to look at your contracts and how you record revenue now before your accountant comes in and notes your revenue is overstated by $300,000.

Rebecca Connelly, CPA is a manager for West Springfield-based Burkhart, Pizzanelli, P.C. She is involved in the accounting and consulting aspects of the practice and manages engagements of various size and complexity, including nonprofit and construction companies, manufacturing, and distributors; (413) 734-9040.

Cover Story

A Six-month Checkup

Mike Mathis, foreground, with recently promoted MGM employees

Mike Mathis, foreground, with recently promoted MGM employees, from left: Marissa Dombkowski, Bill Blake, and Nickolaos Panteleakis.

A half-year after opening its doors, MGM Springfield is well behind its stated goals and expectations for gross gaming revenues, or GGR, and the numbers have been declining each month since the fall. But the winter months are traditionally the slowest in this industry, said Mike Mathis, president and COO of the resort, and the company is still ramping up its operation. Overall, he said, there are a number of positive indicators.

‘Ramping.’

That’s the word you hear quite frequently from MGM’s leaders as they talk about the $950 million property in Springfield’s South End. Jim Murren, president and CEO of MGM Resorts International, used it early and often in a conference call with stock analysts last month following the release of MGM’s fourth-quarter earnings in 2018.

And Mike Mathis, president and COO of MGM Springfield, leaned on it as he talked with BusinessWest late last month, six months after the facility opened its doors. With casinos like this one, Mathis said, the ramping-up process, if you will, goes on for three years or so and is quite involved.

It entails watching, listening, learning, and adapting, all with the goals of growing visitation and, therefore, the bottom line, while also improving efficiency and making the operation in question more profitable.

“I think it’s premature to judge us, or anyone, on a partial data set; it’s a little early to say we’re going to underperform or overperform for our first year.”

“In the context of a new resort, it’s commonly understood within the industry that there’s a three-year stabilization period — a ramp period to stabilization,” he explained. “Three years serves as a benchmark. You’ve been through a few different seasonality rotations, you see the different ranges of weather, you see the different ranges of how holidays land, whether they land on weekends or midweek — you get all those different scenarios.

“You’re also building up your database,” he went on. “Seeing how your competition’s reacting to what you’re doing — how are they activating their property. You get a feel over a couple of years — did we do well that weekend because the competition didn’t have much going on? Or did we suffer because they put in a big act to counter that weekend? That all shakes out over two or three years.”

These references to ramping up are being generated by questions about revenues at MGM Springfield, and, more specifically, about why they are not approaching the numbers the company projected to the Mass. Gaming Commission.

‘Slower’ is the operative word being used with regard to revenues, and it fits if one considers MGM’s projections of $418 million in annual gross gaming revenue (GGR) in its first year of operation, or $34.8 million per month. Indeed, the company recorded $21.58 million in GGR in December, and just $19.7 million in January (February’s numbers will not be released for a few weeks). GGR for November was $21.2 million, the number was $22.2 for October, and in September, it was $26.95 million.

Mathis, while certainly acknowledging that the numbers are lower than projected, at least for the winter months, told BusinessWest that the $418 million projection given to the Gaming Commission was made several years ago, and that the landscape has changed in some ways since then.

Mike Mathis says the winter months are traditionally the slowest for casinos

Mike Mathis says the winter months are traditionally the slowest for casinos in the Northeast, and he is optimistic that visitation will climb as the mercury does.

Meanwhile … it’s early, said Mathis, referring to the fact that the casino has only been open for six months, and a few of those months (January, February, and early December, before the holidays) are among the slowest for casinos, especially those in the Northeast.

“I think it’s premature to judge us, or anyone, on a partial data set; it’s a little early to say we’re going to underperform or overperform for our first year,” he told BusinessWest. “If you look at our August and September numbers, we would have exceeded our expectations. And going into the winter months … that’s the low end of the season.”

And, overall, the casino is still ramping.

That means it’s still learning, collecting data, watching patterns develop, and adapting to what the data shows. As he said earlier, it’s an involved process that involves a number of factors, including the weather. Make that especially the weather.

Mathis said he and his team are tuned into the forecasts, because one thing he’s noticed thus far — and this counts as one of the surprises on his list — is that, despite a reputation for being hardy, people in New England are apparently easily scared off from traveling in snow — or even forecasts of same.

“We thought New England would be hardier than what we’ve seen on some of these snow days,” he said with a laugh. “We’ve had a little bit of experience with snow in Detroit and Atlantic City, but I think every market is unique, and we’re learning some of the patterns and behaviors.

“And it’s not just snow,” he went on, sounding much like area golf-course operators when they talk about rain and how it impacts them. “It’s what type of snow and what time of day it hits and what day of the week it hits. Weather forecasts have become an important tool for operating and planning; it’s been a very interesting learning curve.”

One that extends, as he said, well beyond snow, and into other realms such as where people are visiting from, how often they visit, which games they play, which restaurants they frequent, and much more.

Overall, and as might be expected, Mathis is optimistic that the monthly numbers for GGR will improve as the weather gets better and the casino can make much better use of its outdoor facilities with concerts — Aerosmith is coming for the first-anniversary celebration — and other activities.

But looming over MGM Springfield, in a big way, is the opening of a competing casino in Everett, slated for sometime this summer. Mathis said that development will further alter the landscape and certainly add new wrinkles to the ramping process.

Driven by Data

Mathis told BusinessWest that this first six months of operation have been a learning experience on all kinds of levels, and this, too, was to be expected, because gaming is still relatively new to Massachusetts (Plainridge Park Casino, a slots facility, opened in the fall of 2017), and while those at MGM had expectations, they didn’t know exactly what to expect.

What have they learned? For starters, they’ve learned that visitors much prefer the weekend to the weekdays. And while that sounds obvious, the disparity in the numbers is eye-opening.

“I’m surprised at how weekend-centric the business has been — the difference between weekends and weekdays is pretty dramatic,” Mathis noted, adding that, with the former, visitation averages roughly 18,000 to 20,000 a day, while with the latter, it’s closer to 10,000.

This disparity is far greater than it is in Las Vegas and with most other MGM properties, said Mathis, adding that one big reason for this is a still-ramping (there’s that word again) meeting and convention business in Greater Springfield.

Mike Mathis says the ROAR! Comedy Club has become a solid attraction for MGM Springfield

Mike Mathis says the ROAR! Comedy Club has become a solid attraction for MGM Springfield and a vehicle for bringing new audiences to the resort.

“We have the ability to impact those numbers midweek by putting more convention groups in the MassMutual Center, getting more citywide events, and getting more entertainment mid-week, which we plan on ramping up,” he explained. “There’s ways to impact that midweek business to the benefit of the entire downtown.”

What else have they learned? There’s that aversion to traveling in snow that was mentioned earlier. That was in evidence a few weeks back. The weekend before Presidents Day was one of the best the casino had since it opened, said Mathis, crediting MGM’s ROAR! comedy shows and a host of other things happening downtown and elsewhere, including two Thunderbirds games and a camping and RV show at the Big E, for the surge, one that contributed to one of the few real traffic jams recorded since the property opened.

But the holiday itself (a day off for the vast majority of workers in this region) was considerably slower, and Mathis believes that the few inches of snow that fell overnight had a lot to do with this. Of course, Monday is also a weekday.

What else? Well, to date, MGM Springfield is “underperforming” (Mathis’ word) when it comes to attracting people from Central Mass. Indeed, while the casino does well in drawing people from Upstate New York, New Hampshire, Vermont, and Connecticut (the I-91 corridor), the numbers from the central part of the state are less impressive, which, if you take the glass-is-half-full approach, which Mathis does, means there’s considerable room for growth.

“We’re trying to understand the phenomenon of east-west travel on the Pike, frankly,” he explained. “I think there’s a bias to go north-south — I think that might be the more the traditional traffic pattern, and that’s what the data shows — but we’re also doing well with Boston.

“The good news about how this data shakes out is that there’s upside opportunity for us in Central Mass.,” he went on. “And this might blunt the impact of the Everett casino.”

There have been a few other surprises, including the number of people making their first visit six months after the ceremonial ribbon was cut.

“I’m still surprised by how many people I’m meeting on the floor who are seeing it for the first time,” he said. “Our team has been at this since 2012, so sometimes I feel that anybody who was interested in coming would have come in the first month or two. But there are people hitting the floor every day who are brand new, and for whatever reason have decided that this is the weekend they want to check it out.”

A Laughing Matter

While much of the media’s focus has been on GGR and the hard fact that the numbers are not where they were projected to be, Mathis said there are a number of positive developments to note as the casino passes that six-month mile marker. Here are several he listed:

• The data clearly shows that the opening of MGM Springfield has grown the overall gambling market in this broad region, he said, adding that this becomes clear when one does some simple math and looks at MGM’s revenues and the declining numbers for competitors. The former is larger than the aggregate of the latter, which translates into growth, which bodes well for all players.

“I think one of the good things about new properties coming into the market is it keeps everybody in a position of having to keep up.”

“I’ve met countless customers on our floor who have said that MGM Springfield is their first casino gaming experience, and there’s a few reasons for that,” he said. “Some say they were in Las Vegas, they’re Mlife members, and they’d been to a convention or show, but didn’t happen to go into the casino on that trip; with this in their backyard, they thought they’d give it a try. Others will say they like our non-smoking gaming environment and had never gone into another casino because they didn’t want the smoke; that’s a real competitive advantage for us.”

• The ROAR! Comedy Club has been a solid addition to the MGM lineup, helping to drive visitation, especially during some of the slower months on the calendar. Located in the historic Armory, the shows have drawn consistent crowds, said Mathis, adding that, as the calendar turns to spring and then summer, the team at MGM Springfield will look to maximize its outdoor facilities with a full slate of entertainment to be announced in the coming weeks.

“In talking with the comedians, they say we’re now the buzz within that community — it’s a cool venue, something all the comics want to play on their East Coast rotation,” he told BusinessWest. “it’s a great way to expose the building to different customers.”

• The team continues to find new ways to leverage its many facilities at the casino, said Mathis, noting that it has added entertainment in its ballrooms — Sinbad recently performed two sold-out shows — and the staff continually looks for new opportunities.

“We’re doing a lot of fun activations in different parts of the resort,” he explained. “We want to make sure we understand the booking patterns for convention and meeting groups, and when we see holes, it’s like an empty airplane seat; how do you fill it, and how do you bring new customers to the resort?”

• The hotel and food and beverage side of the casino operation has been exceeding expectations, said Mathis, adding that, among other things, a recently added weekend brunch at Cal Mare restaurant has helped grow that side of the equation.

“Our hotel and restaurant business has been extremely strong, and we thought that would be the case, because there’s good, local lodging and F&B in the market, but perhaps not to a Vegas standard, and we believe we’ve brought a Vegas standard to this market. We’ve exceeded occupancy, and we’ve exceeded our average daily rate.”

• But despite this success, there has been some spillover to other area businesses in this sector, and this is by design, said Mathis, noting that the hotel, with 252 rooms, is not particularly large, and the dining options, while growing (groundbreaking on a Wahlburgers is slated for later this year), leave plenty of opportunities for other eateries in the downtown.

“One of the reasons we sized the hotel the way we did was that we wanted to make sure that developments like ours have a spillover effect to other businesses,” he said. “And we wanted to make sure that came true. Some restaurant owners, including the Caputo family at Red Rose, have been quoted as saying that their business is up 20%, and people are expanding and extending hours.”

• Likewise, the numbers regarding the workforce have been generally positive, said Mathis. He estimated a 35% churn rate since the facility opened its doors, and noted that, while this might sound high to business owners and managers in other sectors, it’s in line with industry norms and actually lower than in many other areas.

Meanwhile, the targets for hiring Springfield residents, veterans, women, and minorities have all been met or exceeded, and many employees have already moved up the ladder since the casino opened its doors.

“I got the stat the other day … I think we’ve had 200 or so promotions since day one, and 30% of those are Springfield residents,” he noted. “Nothing makes me prouder than to see a line-level employee on day one who’s now wearing a suit in a supervisory management role. And it’s happening.”

As examples, he cited three employees who joined him for photos later in the day: Bill Blake, formerly graphic supervisor and now creative manager; Nickolaos Panteleakis, formerly Front Services manager (where he handled many front desk duties) and now director of Front Services; and Marissa Dombkowski, who has been promoted twice already — she started as an HR communications specialist, moved up to Entertainment Marketing coordinator, and is now Marketing manager for the MassMutual Center.

Overall, and to recap, Mathis reiterated that ramping up is, indeed, a three-year process, one that involves a serious learning curve on many different levels.

“I tell my team all the time, ‘if it were easy, everyone would do it,’” he said of casino operations in general. “That’s why we’re here — to manage through, collect data, and be smarter every day as we collect data and finetune the business.”

Driving Force

Mathis was one of those people caught in that traffic jam on the Saturday of Presidents Day weekend.

He told BusinessWest that it took him more than 45 minutes to get to an event downtown from his home in Longmeadow, normally a 15-minute drive. But unlike most others, he certainly wasn’t complaining.

“I’ve never been happer to be in stand-still traffic,” he said, adding that, while it has always been MGM’s goal to minimize such disruption, he’ll gladly take more nights like that in the weeks and months to come.

And he predicts he’ll be getting more as that ramping process continues.

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

Community Spotlight

Community Spotlight

Mayor Will Reichelt

Mayor Will Reichelt says that West Springfield’s biggest challenge may be a lack of developable land, which places a priority on maximizing existing real estate.

Like just about everyone else in this region, Will Reichelt has circled August 24 on all his calendars.

That’s the day MGM Springfield opens, as most everyone knows, and it’s a day of high expectations and some anxiety. Especially in West Springfield, where Reichelt has served as mayor for nearly three years now.

West Side isn’t the host city for MGM, but it is certainly among those to be the most impacted by the $960 million development that has gone up just across the Connecticut River.

The Eastern States Exposition will handle MGM’s overflow parking on August 24, with a shuttle running between the two locations. And the annual 16-day Big E will begin only a few weeks after MGM opens, creating considerable talk — as well as that aforementioned anxiety — about just what traffic will be like on Memorial Avenue, I-91, the Turnpike’s exit 4, the Memorial Bridge, Route 5, the North End Bridge, and other arteries in and around the city.

“It’s certainly going to be an interesting weekend and couple of weeks, with the Big E opening three weeks later,” said Reichelt, in a classic bit of understatement. “It will be interesting to see how Big E traffic interacts with MGM traffic.”

He added, as others have, that traffic and parking issues in the wake of MGM Springfield fall into the category of good problems to have, at least from a vibrancy standpoint. And looking beyond August 24 and the days to follow, Reichelt is hoping, and perhaps also expecting, that MGM will generate, in addition to traffic issues, some additional development opportunities.

“It will be interesting to see what happens long term as a result of MGM, especially just over the Memorial Bridge, where there are certainly some development opportunities,” said the mayor, referring to some of the retail areas on the eastern end of Memorial Avenue. “People have talked about a hotel, restaurants, and maybe redevelopment of the whole Memorial Avenue/Main Street area.”

More specifically, he was referring to redevelopment of some vacant or underutilized properties there and in other areas within the community, which has been the basic M.O. for this city for quite some time.

Indeed, unlike neighboring Westfield and many other area communities, West Side is, as they say in development circles, ‘land poor,’ meaning that most all developable parcels have been developed. That goes for residential development — although a few new small projects seem to materialize each year — and especially commercial development.

Most of the projects in that latter category have involved reuse of vacant or underutilized property, and examples abound — from the conversion of the former Yale Genton property and some neighboring homes on Riverdale Street into the site of the massive Balise Honda, to the conversion of the former Boston Billiards site just north on Riverdale Street into a new Marriott Courtyard.

The most recent example is the stunning transformation of a former auto body shop just off Memorial Avenue into the home of Hot Brass, an indoor firearm and bow range that opened its doors in early August.

“It will be interesting to see what happens long term as a result of MGM, especially just over the Memorial Bridge, where there are certainly some development opportunities. People have talked about a hotel, restaurants, and maybe redevelopment of the whole Memorial Avenue/Main Street area.”

Reichelt said MGM could help trigger more developments of this kind on sites ranging from the old Medallion Motel property just over the Morgan-Sullivan Bridge linking the community to Agawam and across from The Big E, to the United Bank building on Elm Street street (the bank is moving across the street into space once occupied by Webster bank), to some properties north of I-91 on Riverdale Street, which are in less demand than those on the south side of the highway.

“South of I-91 is the real hot spot; whenever there’s a vacancy, it usually fills quickly,” said Reichelt, adding that the city’s board goal is to the make the area north of the interstate just as hot.

For this, the latest installment in its Community Spotlight series, BusinessWest talked with Reichelt about ongoing efforts to bring more economic development to West Side and make the very most of the property that can be developed.

Developing Story

The ambitious Hot Brass venture, which combines a retail sporting goods store with a 17-lane recreational archery and shooting range, is, indeed, only the latest example of how underutilized properties have found new lives in this community.

And, as the mayor noted, this is out of necessity, because there are very few, if any, developable spaces left in this city, for either residential or commercial development.

West Springfield at a glance

Year Incorporated: 1774
Population: 28,391 (2014)
Area: 17.49 square miles
County: Hampden
Residential Tax Rate: $17.05 
Commercial Tax Rate: $32.90
Median Household Income: $54,434
<strong>Median Family Income: $63,940
Type of Government: Mayor, Town Council
Largest Employers: Eversource Energy, Harris Corp., Home depot, Interim Health Care, Mercy Home Care
* Latest information available

“When I was on the Planning Board four years ago, we approved a subdivision, which I assumed would be the last one,” Reichelt recalled. “But then, when I was a lawyer for the city, they approved another one, and I said, ‘that must be the last subdivision in West Side.”

Developers keep finding ways to shoehorn in smaller residential projects, he went on, but on the commercial and industrial side, the city has essentially run out of real estate.

And, as has been the case for some time now, most development — or redevelopment — efforts have been focused on the two main retail thoroughfares, Riverdale Street, home to countless auto dealerships, the massive Riverdale Shops, a cinema complex, several hotels and motels, and more, and Memorial Avenue, home to more auto dealerships, more retail plazas, and, of course, the Big E.

Both are doing very well, and are in seemingly constant motion, development-wise, said Reichelt, adding that over the past few years, Memorial Avenue had added new Fathers & Sons Audi and Volkswagen dealerships, a Chipotle, a new Florence Bank branch, and, most recently, Hot Brass, and a Sketchers outlet store.

Meanwhile, on Riverdale Street, additions to the landscape include the Marriott Courtyard, a new Pride store (the first one with a full-service kitchen), and a Balise carwash, among others.

But there are opportunities on both main drags for additional development, said the mayor.

On Riverdale, these include the site of the closed Bertucci’s restaurant, just south of the new Marriott Courtyard, and some vacant or underutilized property on the north side of the highway.

As for Memorial Avenue, there’s the former Medallion Motel site, but also the closed Hofbrauhaus restaurant, the site of the closed Debbie Wong restaurant (across the street from the Big E), and others.

The United Bank building on Elm Street

The United Bank building on Elm Street, soon to be vacated by the bank, is one of the keys to bringing more vibrancy to the downtown area.

The Medallion Motel site, at the corner of Memorial Avenue and River Street, is intriguing because of its size and proximity to the Big E, although its location, just over the Morgan-Sullivan Bridge, a site of persistent traffic congestion, is seen by some as a drawback, said the mayor, adding quickly that reconstruction of the bridge and a broad plan to redo all of Memorial Avenue from the Morgan Sullivan Bridge to the Memorial Bridge may change that outlook.

Work is slated to begin in 2021, said Reichelt, with plans calling for maintaining four lanes between the Memorial Bridge and Union Street, with some turning lanes carved out in the center (lack of such lanes leads to considerable congestion), with three lanes between the Morgan-Sullivan Bridge and Gate 9 of the Big E, with turning lanes added on that stretch as well. Meanwhile, there will be a bike path constructed on the Big E side between the Morgan-Sullivan Bridge and Union Street, with bike lines on both sides between Union Street and the Memorial Bridge.

As for the much-anticipated reconstruction of the Morgan-Sullivan Bridge itself, that work is expected to commence after this year’s Big E concludes, said the mayor.

Back on Riverdale Street, one of the main goals at present is to stimulate more interest in the section north of the highway. And for many retailers, it remains a much tougher sell.

“We need to help more people understand that north of I-91 is still Riverdale Road and it’s still a high-traffic area,” he explained. “There are many businesses that have been there forever and they’ve done extremely well.”

But while Riverdale Street and Memorial Avenue get most of the attention, community leaders are also focusing efforts on an often-overlooked asset — what’s considered the downtown area, the stretch of Elm Street beginning at Park Street.

That section boasts the Majestic Theater, a few restaurants, including B-Napoli, the town library, a few banks, and some retail, and has considerable potential as a destination, said the mayor.

“Every mayor says they want to have a Northampton-like downtown,” he told BusinessWest. “And in a way, our downtown suits itself to that, because we have a huge common on Park Street and a smaller common on Elm Street.”

The downtown section is hampered by a lack of parking, as many downtowns are, he noted, adding that a recent renovation of the municipal lot by City Hall to add more than 100 spaces will help.

One key moving forward is the United Bank building, which sits adjacent to the Majestic Theater and is around the corner from the city’s offices.

Years ago, the space occupied by the bank was home to a number of small retail shops, said the mayor, adding that a similar mixed-use role — with residential as possibly part of the mix — could help bring more people, and more vibrancy, to that section of the city.

Meanwhile, there are a number of municipal projects ongoing, everything from construction of a new elementary school, to infrastructure work including water and sewer projects, to ongoing improvements to Mittineague Park, all aimed at making the city a better place to live and work.

Some Solid Bets

Projecting ahead to August 24 and the days to follow, Reichelt said West Springfield residents, those who commute through the city, and even retailers on Memorial Avenue should be ready for what’s to come because they’ve dealt with Big E traffic for years.

“They know what to expect,” he said, adding that long-term, it’s a little harder to predict just what will transpire.

Overall, for the city across the river from the casino, the changing landscape presents many new opportunities to put some older properties to new and exciting uses.

There’s been a lot of that in West Springfield over the past several years and there are very good odds (yes, that’s a gaming industry term) that there will be much more in the years to come.

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