The title was innocuous: “A proposal for the reorganization of Worcester’s Economic Development Efforts.” The content was anything but.
In addition to referring to Worcester’s developmental efforts as compartmentalized, inefficient and absent of collaboration, the proposal listed a litany of deficiencies; the phrase “We do not have” appeared in six consecutive sentences.
The paper recommended a new entity, the Worcester Economic Development Corporation, assume the responsibilities of the Worcester Regional Chamber of Commerce, Worcester Business Development Corporation, Worcester Redevelopment Authority, Destination Worcester, and others.
Criticism is common, but this broadside to the status quo, written five years ago, remains notable for two reasons.
First, its author was none other than Michael P. Angelini, Chairman of the law firm Bowditch & Dewey and one of the most influential business leaders in the city. Second, it led to a fundamental change in the city’s approach to economic development — and the effects of those changes are still evident in 2016.
QUOTE OF NOTE:
“There is a difference between being a politician and being a political leader. Politicians are mindful of the pressures they face. Political leaders are mindful of the future that we face. I think it was terrible leadership by the City Council.” Find out what council decision got Mike Angelini fired up later in this story.
The Worcester Economic Development Corporation never came to be. Instead, the Economic Development Coordinating Council was created.
The primary stakeholders in the EDCC are the city, WBDC, the Chamber and Mass. Biomedical Initiatives. But it also includes other members of the business community.
“The EDCC is vital because it allows our city to speak with one voice,” City Manager Edward M. Augustus Jr. said. “It has allowed us to tackle problems big and small, helping countless projects move forward. Many of our economic development successes of recent years would not have been possible without the collaboration and coordination of this important group.”
MBI President and CEO Kevin O’Sullivan, a member of the EDCC, said the group was instrumental in the city’s latest economic development project, the purchase of 44 acres of former Worcester State Hospital property by the WBDC, which plans biomanufacturing facilities on the site.
“The biomanufacturing effort is a perfect example. This is an EDCC project,” O’Sullivan said. “We’ve been working on this for quite some time under the radar because it’s been nothing more than a concept. The group itself — from Tim Murray at the Chamber and Craig Blais at WBDC, myself, the Manager [Augustus], to [Worcester Chief Development Officer] Mike Traynor and others — basically have come together on a regular basis to talk about a myriad of issues. But the biomanufacturing announcement was clearly, we led with the EDCC, which saw the need for it. … I think collectively, it’s a perfect example of the paper five years ago.
“When you look at Worcester and I look at other communities across the Commonwealth, we have a collective, collaborative and connective gene that is just so evident,” O’Sullivan said.
“Mike Angelini clearly had it right. The only concern was, how do you pull it all together? It’s not an easy thing to do,” he said.
“We meet regularly. There’s no BS. I had my Chairman [Abraham W. Haddad] at a meeting a couple of Fridays ago, and when we walked out of there I said, ‘Is this not evidence of substance and accomplishment and everything that Mike envisioned.’
“He may not have gotten everything he wanted. He was trying to put everything under one umbrella, and sometimes a large bite like that doesn’t happen right away,” O’Sullivan said. “Hat’s off to Mike Angelini for surfacing that.”
Last Tuesday [Sept. 20], on the fifth anniversary of the release of his white paper, Angelini, who is also chairman of the board of Hanover Insurance Group and the Massachusetts Port Authority, sat down with the Sun to discuss the impact of his paper, the city’s current economic development efforts, the role public and higher education plays in moving the city forward, the city’s dual tax rate, Worcester Regional Airport, commuter rail, and more.
On Sept. 20, 2011, you wrote a proposal for the reorganization of Worcester’s economic development efforts. In that paper, those efforts were “characterized by compartmentalization and inefficiency and the absence of collaboration. In addition, important economic development functions are not being undertaken, and opportunity is not being exploited.”
Let’s start at the beginning. What was the reaction as your thoughts became known?
I think the specific proposal was a disruptive one. It was essentially saying we have to merge these entities and have one centralized agency. I think the reaction was threatened, people felt threatened, and that is natural because it was really calling for the elimination of agencies and the creation of a new one.
People felt threatened because their traditional roles would be disrupted. I think the conversation, though, that came from it was productive. It’s one thing to talk about consolidation, it’s another thing to talk about coordination. So people felt threatened by consolidation, but I think recognized the theme of what I was trying to say was that there needed to be some coordination. That is really where we’ve ended up, a more coordinated effort.
Did people take issue with your assessment or your proposed solution, a Worcester Economic Development Corporation, or both?
I said some pretty harsh things about the Chamber of Commerce. I think people took some umbrage about that; people have different ideas. It was simply a point of view. My point of view was not the only point of view. I think some people thought my point of view was a bit exaggerated, and sometimes, as Donald Trump says, “You need to exaggerate the truth from time to time.”
Let’s take the first part first. Five years later, have the problems of compartmentalization, inefficiency and absence of collaboration been addressed?
They have been addressed. I don’t think they’ve been solved, but I certainly think they’ve been addressed. We now have the Economic Development Coordinating Council. It meets frequently. The people involved are, I think, enthusiastic about their coordination. They are talking to each other, so periodically, frequently, people from these various groups are sitting in the same room talking around the table rather than talking separately in a disjointed way. So I think we’ve really made a great deal of progress.
Now to the second part. What were the functions that were not being undertaken and what opportunity was not being exploited? You had a kind of laundry list here: “No organization has responsibility for research and planning, no plan for retaining business, recruiting businesses, promoting development of minority businesses.” Were those the things you meant when you were saying that important economic development functions were not being undertaken?
Yes, it was. I am not sure we are there yet. I wear a hat as chairman of the Massport board, so I have a lot of contact with the Boston economic development community. I think real economic development consists of not addressing the issues that you are faced with but anticipating the issues that you should be faced with.
I think that’s done in a more centralized way in Boston than it is here. There is no such body as this Economic Development Coordinating Council in Boston. You have much more of a fusion of organizations. The Boston Redevelopment Authority plays a much more powerful role than it does here. I don’t think Boston has all the answers, but I do think that we would profit from a more strategic approach than the more tactical approach that I think we’re faced with in Worcester.
Now, we’re addressing some of these issues. The biomedical park, the biomedical industry, what the WBDC is doing in that regard. What the chamber is trying to do to attract business, that is somewhat strategic, but I am not sure we have a multi-year plan, with a multi-year objective, a set of metrics by which we can judge how well we are coming along with that plan. I think we could profit from that, but we are a lot closer to it than we ever were, a lot, lot, lot closer than we ever were.
I think finally the community is coming together on the issue of economic development, having defined it, deciding how we want to do it, trying to figure out what our niche is and should be, I think it is much less of a scatterbrained approach.
The subtext, as I read it, is that you felt Worcester wasn’t, in terms of economic development, competitive. Is that a fair reading?
Then who or what exactly is Worcester’s competition?
We are now in a situation in this country where states are in competition with each other for economic development. Communities are in competition. We are buying businesses. North Carolina is paying businesses to go there. Rhode Island is paying businesses to go there. We have an economic competition.
I think in terms of Worcester, which leads me to a different subject, our competitors are certainly the Boston area, but also other communities. One problem we face in Worcester is the perception, the perception, that we have a substandard public school system. My view is that part of our economic development efforts need to be to establish a first-class public school system. That will bring people here. It will bring businesses here.
I am chairman of the board of Hanover Insurance. It is a hugely important organization in the city. In talking to the people at Hanover, some of them choose not to live in the city because they believe they can get a better public school education somewhere else. Whether that is true or not is one subject. But the fact of the matter is that if there are a significant number of people who feel that way and who have business interests, well — if you want to find out where a company is headquartered: find out where the CEO lives, you’ll find where the company is headquartered. That’s an adage, but I do think that’s a disadvantage to us.
We are at risk [of] losing businesses and people to other communities that are perceived to have better public school systems. I think that piece needs to be part of our economic development agenda. In other words, think about that as part of our economic development agenda rather than think about that as the glory of having good public schools.
So economic development will come in two ways, because people will want to locate their business here …
… and a better public school systems mean more people create jobs …
And more people staying here for the jobs that we have created. Then you build a vital organization, you build a vital community, you have more engaged organization in the community. Pretty soon, you’ve got a pretty vibrant economy.
During a Worcester Regional Research Bureau panel discussion last year, Fred Eppinger, at the time the CEO and President of Hanover Insurance Group, said his company received on average one offer a day to relocate. What does that tell you about the competitive nature of economic development efforts?
Think of the enormous amount of negative capital that is being used, of capital that’s being used negatively, to entice people to move from one place in this great country to another place in this great country. It’s stupid. Really, you think about it, it’s stupid. The same thing is happening in Massachusetts. People are giving tax breaks, incentives, encouragement, stealing business away from each other essentially when we are all in this together. That is a problem. I don’t know the statistics at Hanover, I take Fred at his word, but I am not surprised.
Is this an opportunity or a threat for Worcester?
I think it is a threat. I don’t think we can buy business. I don’t think we can buy economic development.
I think we need to strategize more about it more than finance it. It is a question of being smart rather than a question of being rich, because we aren’t rich. So then, if we are not going to be able to buy business, what do we do to attract it? I think it is emphasizing our strengths. I am not sure we do that as well as we could. We are doing a lot better than we did.
We have some great strengths, right? Great neighborhoods. We have a great group of committed people. We have tremendous cultural organizations. We’ve got great colleges and universities. We have diversity. We have relative safety. I mean, we are not the safest city in the world, but we are a lot, lot safer than many other urban areas. We have clean government. Those are all huge advantages that we have over other communities. It’s a nice place to live.
Your paper touched on three aspects of economic development, which are also, by the way, the words the Worcester Regional Chamber of Commerce uses: Recruit, Retain and Incubate. Which of those is the hardest, and which is easiest?
I don’t know. That is a good question. I think it is easier to pay attention to recruit than it is to pay attention to retain and incubate. It’s superficially easier, doesn’t require as much thought. It’s something we are all most used to doing. Recruiting is easy, it comes to you naturally. I think retaining and incubating are the two of those words that I’d pay more attention to, if I personally were involved. But they are all important. It is hard to choose.
What role do Worcester’s colleges have?
I think they have a huge role here. If you think of them now, a lot of people come to Worcester schools, they pass through them and they pass on. So the question is, how do we use our schools not just to educate people, how do we make them into the fabric of this city? How do we say, when you come to Holy Cross or WPI or Clark or Becker, you are coming to Worcester and you are being engaged by the Worcester community, as opposed to passing through in two years or four years?
Some of the schools in Worcester do an extraordinary job with engaging in the city. Look at what Quinsig has done downtown, and what they’re doing in that regard is really, I think, pretty powerful. … I think the schools are doing a good job. I think we could take better advantage of them. We need to connect more with them. This does not feel like a college town.
That has been the door everyone has been trying to unlock for years, right? This is going back decades.
Right, right. So there’s a lot being done, and Tim and people at the chamber are working a lot on this. I think they are doing a much, much better job than they’ve ever done before. But I just have a sense that we have not capitalized on it sufficiently. I don’t know how to do it, but there are a lot of smart people who can find this out.
You wrote that the city’s dual tax rate is “felt by many to be an impediment to expansion of business in the City.” Last year, after years of closing the gap, the City Council stepped back from closing the gap [between the business and residential tax rates]. What does that tell you?
Huge mistake. It’s a huge mistake. I think the City Council acted in the present and not for the future. It is our responsibility to pay more attention to the future than we do to ourselves presently. I think it was regressive, unnecessary, disruptive. Regressively harmful message is what it is. It stated, “We want to exploit what we have” as opposed to “We want to reach for the future.”
If I was a young person and I saw that vote I’d say, “This is a community not interested in progress, it’s committed to comfort.”
I remember a guy named Fairman Cowan, who you maybe knew. Fairman was a great guy. Fairman would go to the City Council meetings once a year, budget time, and was famous for this … and all the senior citizens would be there and saying, “We need more for the senior center. We need more …” Fairman would go there in his late 80s and say, in effect, forget about all these people, they are all going to die, let’s take care of our children. I think that is part of the same phenomenon, which is how do we take care of ourselves rather than how do we build for the future.
I think it was an unfortunate vote. It was not a building-for-the-future vote. It was making sure we’re more comfortable now, taking care of a constituency to which I belong. I own a house. I’d be happy to pay more taxes for a more forward-looking city.
But obviously they’re under different pressures, constituent pressures and all that. They are hearing different …
They are under constituent pressure, but, look: there is a difference between being a politician and being a political leader. Politicians are mindful of the pressures they face. Political leaders are mindful of the future that we face. I think it was terrible leadership by the City Council.
On another topic, you’re the Chairman of Massport, appointed to the Board by Gov. Patrick in December 2010. What’s the role of Worcester Regional Airport in the city’s economic development efforts?
I think it is significant in two ways. Business people need to travel. If we can get them to travel to and from Worcester, then we make Worcester more attractive for businesspeople to come. We can grow business and provide employment.
I also think it has something to do with the psyche of the city. This is a city in search of success. Having a vibrant airport is a notch in your belt, an earmark of being a major place. Worcester airport is significant for the service it can provide, which it doesn’t provide as much as it should right now. It is also significant for telling us this is a major city. People travel to here and they travel from here. I think it is psychologically as well as effectively important.
The latest iteration from JetBlue has found success by all metrics. Is that correct?
JetBlue will tell you it’s very successful. The problem is it’s successful in bringing people to and from Florida. Guess what? Palm Beach, Florida, and Orlando are not economic centers, so if we want Worcester to be an economic center we need to find a way to connect it to other economic centers by air. Massport is working very hard to try to accomplish that.
We can’t say Worcester Airport is successful because JetBlue has full flights to and from Palm Beach and Orlando. But … I think it is being viewed by the aeronautics community right now as an opportunistic situation.
Do you see additional airlines and flights in Worcester’s future? If so, what time frame?
I hope so. The principal objective is to convince a carrier to fly from Worcester to a place from which you can get to wherever you want to go in the world. Frankly, you can’t do that. New York, either Kennedy or LaGuardia, Philadelphia, Baltimore, some place like that. That would be a home run.
Not that this is a Massport issue, but rail. Obviously in the past six years, although the CSX [expansion] deal was done before your wrote this paper, but you have had increased commuter rail, we have a hockey team named the Railers, Boston Surface is trying to get connected to Northeast corridor. What role does rail play?
I think what we need is reliable, less-than-an-hour service to and from Boston. That is what we need. We have one train a day that presumes to do that. In my mind it is simple. Instead of spending more money on highways, that ought to be a priority.
If you had hourly train service between here and Boston … we would have an urban center an hour away from a huge urban center. There aren’t many models like that in this country. It would really be a distinctive thing. People could live in an urban environment and in one hour be in a world-class city [Boston]. There aren’t many places in this country you can do that.
On another topic, your current term as chairman of the board at Hanover Insurance Group ends in 2017. What are you looking to accomplish in your remaining time as chairman?
The most important thing a chairman of a public company can do is to stay the hell out of the way. It isn’t really that important a position. Being chairman of the board of directors is being the lead director. I don’t have a functional role, I do not have any financial responsibility. My role is to be an interface between the board on the one hand and the CEO on the other, but not to be a filter, not to be a barrier in that relationship. We have a new CEO [Joseph M. Zubretsky] in place. He’s doing a great job. I have a little history, so maybe I can be a history teacher, but not much else.