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Entrepreneurs stress need for innovation

July 2, 2014 | Chris Maza and Carley Dangona
chrism@thereminder.com, carley@thereminder.com

An artist’s renderings of the proposed Springfield Innovation Hub, touted by Delcie Bean, CEO of Paragus Strategic IT, as a potential source of ideas and collaboration for tech startup companies in downtown Springfield.
Reminder Publications submitted photo

SPRINGFIELD – While many area officials consider the MGM Springfield casino proposal to be the lynchpin to increased economic development in the city, a pair of small business owners in the Pioneer Valley stressed the need for more entrepreneurial support in order for the region the thrive.

At the Western Massachusetts Development Conference on June 26, Springfield Mayor Domenic Sarno called the MGM project – approximately one third of the $2.8 billion in development projects slated for the city – “the catalyst in our economic development plan.” Incoming MGM Springfield President Michael Mathis made a pitch opposing the upcoming casino referendum vote and touted development opportunities that would be created, such as additional off-site hotels, by the construction of a gaming facility.

Shortly after those remarks, however, Paul Silva of Valley Venture Mentors, River Valley Investors and Angel Investors, and Delcie Bean, CEO of Paragus Strategic IT, spoke of another economic development alternative. They told a group of 300 current and potential businessmen and women and public officials gathered at the Naismith Memorial Basketball Hall of Fame that greater Springfield has the foundation for an economic renaissance through start-up companies that needs to be fostered and built upon to help the area flourish.

“The Pioneer Valley has a good entrepreneurial ecosystem,” Silva said.

Silva and Bean explained that an influx of small companies has spurred brick and mortar development in what had been struggling or depressed areas in the past. They chose Kendall Square in Cambridge as an example of a multi-building development that took shape out of an unused parcel of land thanks not to a large corporation, but hundreds of start-ups.

The two graded the Pioneer Valley’s resources for entrepreneurs, giving the area mixed results. They said while the area already has a lot of positives, such as a good number of collegiate entrepreneurs, a strong workforce and a good amount of available flexible workspace, there are several opportunities that if addressed could help make the area even more attractive.

Among the biggest challenges facing the region, they said, were a lack of sources for seed money and accelerators, despite endeavors such as the Holyoke Innovation District, which Bean called “promising.”

Massachusetts Mutual Life Insurance Company announced later in the day that it would help in that regard, unveiling plans for the establishment of the Springfield Venture Fund through which the company would invest $5 million in startup companies during the next five years, plus an additional $1.5 million during the next three years in support of an accelerator program through Valley Venture Mentors. DevelopSpringfield will be involved in the project by building the physical location for the accelerator.

“Since 1851, MassMutual has been proud to call Springfield home. We see great economic development opportunity in the city, and we’re proud to contribute to the positive momentum with this announcement,” Tim Corbett, MassMutual’s executive vice president and chief investment officer, said. “The Springfield Venture Fund will enhance the city’s already strong entrepreneurial environment for start-ups, as well as help entrepreneurs grow their business, create jobs and generate additional tax revenue for the city.”

In addition to money, Silva stressed the importance of having established businessmen and women who were willing to act as mentors and pleaded for those in attendance to lend a hand.

Bean said there was a need for increased training to develop a stronger tech workforce, though there were some initiatives, such as Tech Foundry, a Springfield-based nonprofit that offers job-specific technological education.

Bean also voiced excitement about a “watering hole” concept for downtown Springfield called the Springfield Innovation Hub, at which new tech business solutions could be discussed in a coffeehouse setting. According to the current proposal, that establishment would be located near the former Federal Building on Main Street.

F. Michael Digiano, executive vice president at the Boston-based real estate brokerage NAI Hunneman, said Springfield was also a prime location for larger operations, such as manufacturing.

He explained that he was acting as the site selector for a Chinese company, Changchun Railway Vehicles Co. (CRC), and a Springfield facility would be the company’s first in the U.S. CRC is currently awaiting a decision as part of a bid process to determine what company would be contracted to build a series of upgraded trains to replace the existing ones on the Massachusetts Bay Transit Authority’s Red and Orange lines.

“The CRC project would be a catalyst for the North American market,” he said.

The facility, which would cost approximately $30 million to build, would be located at the former Westinghouse site on Page Boulevard. Ameristar previously attempted to sell the city on a casino located on the site.

The existing rail infrastructure that could act as a test track for the trains was among the things that made Springfield an “ideal location.” A number of other resources, including the local technical schools and programs, which could provide workers, also made the area attractive.

The number of people looking for work was also taken into consideration. The train factory could employ close to 300 people and CRC saw that as an opportunity, Digiano explained.

“We looked at the employment climate in the city and saw this as an opportunity to help the community,” he said.

Attendees were also treated to bus tours of “shovel ready” sites awaiting further advancement throughout Western Massachusetts.

Properties in Springfield, Ludlow, Holyoke, Chicopee and West Springfield were viewed during the 2 ½ hour driving tour, which took place after the day of discussions. An official from each perspective city or town was on hand to guide guests through the features of each plot.

All sites lie within the Knowledge Corridor that spans from New Haven, Connecticut, to Amherst and features 29 colleges and universities. 

“Mills served as magnets or catalysts for immigration,” said Kenn Delude, president and CEO of Westmass Area Development Corporation, who served as host. “It’s essential that we find ways of adaptive use of these buildings.”

All cities and towns featured multiple development opportunities. The following are some highlights:

• Springfield – Smith & Wesson Industrial Park, 25-acres, minutes from major interstates and access ways. The area is owned by the Springfield Redevelopment Authority and is being developed in conjunction with MassDevelopment. The park can produce a maximum build-out of 650,000 square feet of industrial, commercial, general office space, or a combination of these uses. Tenants include Performance Food Group and FW Webb.

• Ludlow – Ludlow Mills. The property is listed on the National Register of Historic Places and is zoned for mixed-use. Spaces can be leased from 2,000 to 200,000 square-feet.

According to Delude, the 170-acre site features 1.5-miles of riverfront property and 1.5 million square feet of space total.

• Chicopee – RiverMills Redevelopment Parcel 4 – 3.85-acres, located next to the newly built RiverMills Center for seniors.

Lee Pouliot, planner and administrator for Chicopee’s Community Development Department, noted that a $730,000 sewer pump station is slated for construction at the RiverMills Redevelopment site in 2015. He said the entire property has undergone a “site-wide environmental mediation” to prepare it for expansion.

• Holyoke – The Holyoke Innovation District offers many advancement opportunities, including a property located at 195 Appleton St., which features a 230,000 square-foot building, 18-inch concrete floors, general-industry zoning and multiple floors. The city’s three-tiered canal system is adjacent to the site.

Marcos Marrero, director of Holyoke’s Planning & Economic Development Department, commented that Holyoke Gas & Electric provides “green, cheap power” since it’s municipally owned.

• West Springfield – An 1880s mill building, 150 Front St., features three stories, 18-foot ceilings and 75,760 square-feet. The CSX Corporation rail yard is located next to the property.

University of Massachusetts Professor Jim Mullen discussed the importance of “recapturing the essence of its [the buildings’] industrial past. He described West Side as a town of “human skill” and stated he is eager to see the site utilized again. He anticipated that the location would be rezoned from industrial to mixed-use to accommodate a greater number of businesses.

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