Times Call for Creativity

What a difference a year makes! In December 2007, optimism reigned and the new Plattsburgh International Airport and favorable Canadian exchange rate dominated conversation at the 19th annual Strictly Business round-table discussions. A mere 12 months later, optimism lives but it’s of a much more cautious nature, and the thriving airport and finances of our neighbors to the North are overshadowed by uncertainty concerning the U.S. economy and its impact in Clinton County.

Consumer confidence was the greatest general concern as 2008 wound down. The influence of the national media and its perceived delight in accentuating the negative only exacerbate the challenge of righting the economy.

As Jerry Rosenbaum of Adirondack Appraisal observed, “The world is flat and we are all experiencing that. The stock market in Japan influences what happens here. We’re being impacted by many things that are out of our control.”

The uncertainty is disquieting. Tom Hoy of Glens Falls National Bank brought that point home by admitting his lack of confidence in the bank’s 2009 budget. “All of the years I have been involved in putting budgets together, this was the toughest. There’s volatility in everything and it’s difficult to project trends.”

Some things you can count on, Don Phaneuf of Lake Champlain Roofing observed when he admitted he had no idea how things would shake out overall. He added he remains confident that people will always need roofs and there will be some new construction. A third-generation roofer who started the business ten years ago, Phaneuf was happy to report that 2008 had been surprisingly positive despite the impact the high cost of fuel had on a business built on oil-based products.

There is a certain irony because everyone at the table reported a pretty good 2008, particularly through the first nine months of the year, while wondering if the momentum can possibly continue.

John Bernardi, executive director of the Clinton/Essex County United Way, noted that his organization and its 33 agencies continue to be a very healthy and vibrant resource for the area. The United Way has done well because it operates in a transparent fashion, helping to ensure our area remains a great place to live by meeting important community needs. At the same time, Bernardi recognized that the impending transition at Wyeth poses some degree of uncertainty and future challenges. He and members of his board of directors have identified a definite need to expand the existing base of 3,000 donors. “We’re trying to put our eggs in many baskets while going after many untapped areas for support,” Bernardi said.

Adore Kurtz, who heads the Development Corp, works hard to try to position the community to capitalize on its strengths in order to take advantage of opportunities. Her background as a regional planner has served her well and it’s not surprising that the Development Corp is the largest owner of industrial property in the region. Kurtz commented that attracting Nova Bus to the community, selling that company 25 acres to build on with an option to purchase 20 additional acres, and receiving a $750,000 grant for training 200 of the company’s new employees topped off a highly successful year.

Trent Trahan of Primelink runs a family-owned communications business that has evolved since 1903 from the then-primitive telephone to today’s voice data. “Our numbers are still not in yet, but we had a very good year,” Trahan said. “The interesting thing is that some customers that we had not been able to talk with are suddenly anxious to speak with us because they are finding the big guys aren’t willing to adjust pricing.”

Betsy Vicencio is vice president/chief financial officer of The Northeast Group, which specializes in commercial printing, direct mail services, fulfillment and distribution. Her three years with the company have seen exciting times in the North Country, at least from her perspective. The company is still growing, expanding its customer base in all three departments, and specifically diversifying the type of goods being distributed by the fulfillment division. Taking advantage of the proximity to Quebec and the dynamic supply chain corridor, The Northeast Group has found a great niche in retail-based product/order fulfillment, but as she noted, the retail industry is fickle. “We anticipate some changes in the volume of goods passing through our facility. It’s been fun to watch things unfold, but it’s challenging. One of our goals as a company in 2009 is to do all that we can to keep all of our people gainfully employed,” Vicencio stated.

Employment and the economy loomed large in everyone’s thinking, although there was agreement that our strategic location should prove to be an advantage. “This region has the ability to weather the current economy better than most,” Hoy predicted while adding that he’s loved the community since his arrival in 1997 when Glens Falls National purchased Fleet. The recently opened branch on the former air base is the bank’s 33rd location.

However, a positive mindset on the part of consumers is imperative. Kurtz observed that everyone that she knows paid off debt or invested in the future by adding new storm windows or converting from fuel oil to natural gas when they received their stimulus tax rebate checks. “Nobody I know went out and bought a television,” she said.

“Factors impacting the every day cost of living are the single most important issues,” Bernardi stated. “If the cost of living is high, people cannot give or give as much to the United Way or to other social service agencies. Yet now is when the services are needed the most. That’s reality.”

Bernardi cited the mental perception concerning the price of fuel as a classic example of how consumer psychology can play as significant an impact as the reality of the cost of gas at the pump.

“We’re talking to businesses about public transportation and then we’ll talk to employees about their perceptions of public transportation,” Kurtz said. “We need to make sure employees can get to work.”

Trahan agreed, noting that in his opinion having a highly trained work force remains a critical issue for the North Country. “We need people at Primelink who can come in and hit the ground running in a high tech industry.”

Rosenbaum admitted to being “a statistics kind of guy,” and shared some positive statistics that real estate in the Plattsburgh area has continued to appreciate. He also noted that tax revenues are down and the cost of fuel and salt is up. “Government is going to have a harder time.”

Kurtz suggested that the area would benefit greatly from more government cooperation and consolidation. Rosenbaum recommended a few small victories achieved by merging offices. There was general agreement that New York is “blessed with too much government” which, in part, explains why the state owns the distinction of having the highest real estate taxes in the country.

Talk of the future began and ended with agreement and concern about the news media’s influence and impact on consumer confidence. Trahan noted that we are a product of our national media.

Hoy expressed tremendous frustration because he believes the days of traditional, unbiased reporting have ended. “Everything’s an opinion piece,” he said. “The media is monopolistic and it’s become the single biggest factor shaping our future. Consumer psychology has a huge impact on our business and these are scary times out there from a consumer’s perspective.”

Bernardi complimented the recent two-page ads that Glens Falls National Bank ran in the Plattsburgh Press-Republican that cite growth and speak optimistically about the days ahead. Vicencio agreed and expressed her belief that the business community has an obligation to question the media and help shape the future in a more positive nature.

Few of us enjoy uncertainty, and bringing seven business people around the table in December 2008 to discuss the future brings out realistic concerns about what the next year may bring. However, cautious optimism did prevail.

Hoy said his bank is actually doing quite well with mortgage and car loans, in part because some of the competition has vanished. “I don’t know of a bank that’s not lending to people who can pay back the loan,” he said.

Trahan explained the key to long-term success in the communication field, “Whoever wins the 50-megabyte pipe to the home will be the winner.” In other words, if you can bundle telephone, Internet and TV cost effectively, consumers will find you. He believes Primelink will be a winner.

Phaneuf has been fortunate that he has had enough work in the North Country that he’s actually shrunk his service area. One of his specialties, high-end Adirondack camps, have not experienced the economic downturn to the extent that the local residential markets have.

Because of The Northeast Group’s fulfillment customers’ reliance on the retail industry, Vicencio anticipates 2009 revenues will remain on par with 2008. Northeast would like to hold ground and then resume its growth track as the national and world economies pick up.

Rosenbaum, who admitted having parlayed a summer job many years ago into what evolved into his successful family business today, provided words to live by. He noted that small businesses in the North Country have to be creative and flexible while working to expand their customer base. “We seem to thrive on adversity,” he said. “Given the challenges we just may have to stretch our business plans in different directions.”