In a room full of local leaders, innovators, strategists, and passionate community advocates, a bystander would have been remiss in not taking advantage of the opportunity to engage. Against the backdrop of a continuously changing modern economy, Forum participants voiced both unique and unanimously shared challenges throughout the room.
Table Two included a dynamic and influential cast of local leaders, including Matt Boire (licensed broker, CDC Real Estate), Carol McLean (owner of Irises Cafe & Wine Bar), Bob Donlan (partner/CFP, Donlan & Barcomb), Andrew Wylie (district attorney, Clinton County), Stephens Mundy (president/CEO, UVMHN at CVPH/AHMC), Eric Zeisloft (VP of operations, Mold-Rite Plastics), Maria Alexander (executive director, Senior Citizens Council Inc.), and Mike Carpenter (president/CEO, The Northeast Group).
The conversation flowed through reports of business success, new and recurring challenges, the current political climate, concerns about the opioid epidemic, and overall excitement for the future of Plattsburgh. Change, along with the ability to adapt, was a common theme of discussion.
2017, A Year Full of Success
Despite a political climate that seems to have many Canadian clients concerned, Boire said CDC had another great year in 2017. CDC Real Estate takes care of clients in the commercial and investment property realm, with a niche in Canadian and international business. “Business has been good. I’m optimistic for the future,” said Boire. Part of CDC’s success can be credited to its diversification of clients and business partners. CDC maintains relationships with other brokers and investment firms throughout the country, which has shed some additional spotlight on the investment properties they market for sale.
The restaurant business in Plattsburgh has changed significantly over the last several decades. Today, residents of the greater Plattsburgh region can spend an evening downtown enjoying a variety of activities. According to Carol McLean, owner of Irises Cafe & Wine Bar, the local support for small businesses and restaurants has been beneficial. “Overall, I think the local movement to support local restaurants, as well as people being more aware of what they’re eating, is a great thing. It’s what we’ve done all along. Fresh food made from scratch,” she said.
Investments also were strong this past year. “2017 has been a good year!” said Bob Donlan, partner and certified financial planner at Donlan & Barcomb Advisors. The business of managing someone’s investments can be very complicated, especially in a polarized political environment with strong supporters on both sides of the aisle. In anticipation of the recently passed tax reform bill, Donlan recognized the upside and downside it could have on the market. “You have to try to keep politics out of the investment world,” he said. Donlan predicted that this coming year could be very good for corporations, but he cautioned that only time would tell.
Clinton County District Attorney Andrew Wylie gave an annual report to the group as well. He explained that the DA’s Office runs on a budget of about $1.3 million each year. “We’re actually forecasting a decrease in our budget [expenses] by tens of thousands in 2018,” said Wylie. “A lot of that is just based on staff movement.” He referenced the example of a new hire in 2017, who didn’t have family to support, so he didn’t require an extensive benefit package. In addition, Wylie said violent crimes were down in Clinton County this past year.
The local hospital had an interesting 2017 as well. At last year’s Strictly Business Forum, Stephens Mundy, president/ CEO of UVMC at CVPH and AHMC, reported that CVPH had a deficit of $7 million for 2016, including a $4 million take back from the government for five years prior. “We were reeling from that,” said Mundy. “This past year we really spent a lot of time leveraging the benefits of being in a system, and with a lot of hard work from a lot of people locally, we finished 2017 with about a $2.5 million profit,” he said. This was a big accomplishment for CVPH, but Mundy reflected on the relative success as a margin. “It sounds like a lot of money,” he explained; “It’s not 1 percent.” Even so, Mundy appeared optimistic about the progress CVPH continues to make.
“Mold-Rite is having a banner year,” said Eric Zeisloft, VP of operations at Mold-Rite Plastics. “We’ve seen over 10 percent growth in sales in Plattsburgh this year. That growth has been so strong that production is constantly struggling to keep up,” he said. According to Zeisloft, the other two Mold-Rite facilities in New Jersey and Ohio are doing equally as well. “We’re growing at an amazing rate. It has been especially encouraging as most of our competition is experiencing either flat or declining sales,” he said.
The Senior Citizens Council’s executive director Maria Alexander was very optimistic about the impact the Council had in 2017 as well. “We had a good year. We’ve had to learn how to grow and how to pro- vide more opportunities for the older active population,” she said. A prime example is the new pickleball craze in town. “As much as people joke about it, [pickleball] is one of the biggest growing sports in Plattsburgh. There are at least 600–700 people who play pickleball on a regular basis,” said Alexander. She doesn’t take credit for the idea, which she was first exposed to about four years ago. However, the game is just one example of how the Senior Citizens Council continues to add value in the community.
“We would consider this a bounce-back year,” said Mike Carpenter, president/CEO of The Northeast Group. Although sales were down about 10 percent for the year, gross profit numbers were up roughly 12–13 percent. Nearly 80 percent of The Northeast Group’s business is warehousing, storage, rentals, and fulfillment services. “We stay in printing and mailing because it keeps us local and it’s a good piece [to the business], but our bread is buttered with what we do in warehousing and fulfillment,” explained Carpenter. Overall, the success The Northeast Group experienced in 2017 has been an invigorating shot of energy that keeps him excited about leading his team into 2018.
As far as case work, District Attorney Wylie and his team have been busy in 2017. “Violent crimes are down. Drug cases are up. The only violent crime trend that we’re still seeing move upward is drug-related robbery or burglary cases,” said Wylie. “The opioid issue is present locally, regionally, and nationally.” There are several groups and community leaders coming together to help the DA’s office tackle the opioid epidemic, however. “That’s the battle we keep fighting,” he said. This concern has affected businesses across the region, opening up a wide variety of difficulties for employers who are trying to support and retain their employees while maintaining profitable businesses.
“The restaurant business nationally has been pretty stagnant in 2017,” according to Irises owner Carol McLean. The general trend she has noticed within the industry is a pivot toward supporting local restaurants instead of large chains/franchises. This has facilitated more opportunity for local competing restaurants to open downtown. “Locally, with more restaurants downtown, competition has increased. Sales have stayed pretty much the same. Our expenses are ever-in- creasing,” she said. McLean referenced the mandated wage increase she had last year, which was a significant gut-check to any small business restaurant. “That was a pretty hard hit,” said McLean. “I’ve had an over 35 percent increase in wages, but still charge $2.49 for a cup- cake. We still charge $7.99 for a sandwich.” Despite these challenges, Irises continues to stick to its core principles and remains a strong dining option for residents and visitors.
As healthcare continues to improve and people live longer, the senior care industry continues to change. Today’s seniors don’t simply want to gather and enjoy a cup of coffee together, necessarily. “They want more,” said Alexander. Adding more programming presents a unique challenge, since grant funding and fundraising support remain relatively static. There are minimum wage increases to consider, food costs, and even a nutrition program for Clinton County (providing about 650 meals a day). “Home Delivered Meals” is an expensive operation, with 17 different delivery routes, and oftentimes drivers are paid minimum wage or receive mileage reimbursement for their volunteerism. Alexander and her team have been forced to get creative, but continue to find ways to provide this meaningful and important service.
The Tax Bill, Employee Retention, and the Impact in our Community
As anticipation grew for the newly signed tax bill, Table Two participants discussed their predictions on how that new legislation will affect their respective industries in 2018. At the time of the Forum, it appeared that the results could vary significantly depending on the company and the industry.
“Right now, companies have been buying back their own stock, increasing their dividends, doing some mergers and acquisitions,” said Donlan. In some industries, wages have remained stagnant for quite some time, while other industries have seen increases, depending on the role. This creates an environment where companies must compete to retain their employees. According to Carol McLean, potential trick- le-down benefits haven’t increased annual sales at Irises. They’ve remained consistent year after year. In her industry, she’s had to be creative to meet increased sales growth goals by adding other revenue sources, such as expanding her catering options, adding delivery service, etc. “I opened DeLish seven years ago and minimum wage was $7.25. That’s what we paid with people getting tips as well,” said McLean. Pretty soon, that number will be $10.40 per hour. Even with these increases in wages, she hasn’t seen a benefit from trick- le-down economics in the form of increased spending by customers over the years. “I don’t necessarily think that—in our area—that’s what’s been happening,” said McLean.
Many hope to see the new tax bill produce a trickle-down effect for employees, which will increase available spending capital amongst average citizens while helping companies retain top talent. “What we’ve found [at The Northeast Group], is that $.50 or $1.00 per hour doesn’t necessarily make as much of a difference for employees if you can offer things that are more germane to them,” said Carpenter. Benefits such as flexibility in their schedule to help support childcare, or better healthcare coverage are valuable incentives for employees. “In our case, we’re a company that shares its money with our employees. We always have been,” he said. “If the tax incentive helps us as a company, we will do that,” said Carpenter.
The biggest question our Canadian neighbors continue to ask is, “What’s going to happen to NAFTA?” Matt Boire gave great insight on this sub- ject, referencing how it’s not necessarily a question of the new tax bill, but instead a question about free trade. “If you’re a Canadian company and, let’s say, you do $5 million a year and 30 percent of your sales are in the United States, that’s a big chunk. Everything’s been going fine. Maybe your products enter the U.S. duty free right now. If that all changes, maybe NAFTA gets rewritten, then you suddenly have a duty on these products,” explained Boire. This could become a huge hit to the bottom line of many Canadian companies currently doing business in the U.S. According to Boire, some companies may steer away from doing business in the U.S., while others will consider new investments within the U.S. so they can now manufacture the goods in the U.S. instead. “Ironically, there could be some potential opportunity here,” said Boire.
For Mold-Rite, it was difficult to say whether any tax incentives the company receives would trickle down to employees. “Tax incentives will likely be reinvested into the company to promote continued growth,” said Zeisloft. Although this may not directly increase wages, it does create a solid environment and employment for all Mold-Rite employees. “Wage increases are always an important part of retaining employees and staying competitive in manufacturing,” said Zeisloft. “Although we have done some wage increases over the past couple of years, we are working very hard to do other things to make improvements for our employees,” he said. Mold-Rite has invested a lot of energy into providing unique perks and incentives for their employees to help with retention. Similar to The Northeast Group, Mold-Rite has implemented scheduling flexibility when possible, coordinated special bus lines, allowed for split shifts, and created employee referral programs.
Looking Ahead to the Future
Although most area residents know Mold-Rite as a local company, not everyone realizes it is a national company with two other locations in New Jersey and Ohio. All three Mold-Rite locations have solid growth projections for 2018. “Much of our new business is coming from high-volume customers,” said Zeisloft. “We’ve always been much more of a niche company that will do anywhere from one case for a customer to millions of caps that will go on a container overseas.” Now, Mold-Rite is starting to get bigger business from customers such as major pharmaceutical companies across the United States, while also maintaining its smaller business. The company’s forecast for 2018 is even bigger, according to Zeisloft. “We’re growing at an astounding rate,” he said. Mold-Rite currently employs about 450 employees locally in the region. “I often jokingly remind people that we employ 2.3 percent of the population of Plattsburgh,” said Zeisloft.
Moving forward into 2018, Mundy and the CVPH team are budgeted to achieve a 1.5 percent margin. “I think our long-term goal is around 3 percent,” said Mundy, referencing how the goal will force them to reinvest in their own organization. Healthcare is certainly changing dramatically. In particular, the way it is paid for is changing. For CVPH, this will likely translate into assuming for risk with insurance contracts. “At 2 a.m., find me an insurance company that’s awake,” said Mundy. “It’s the healthcare provider who you trust….” Part of the solution, according to Mundy, is investing in more preventative care facilities and programs. “By assuming more risk, we have the resources to invest in the community,” he said.
The Northeast Group is truly an international company, with major clients in Germany, Italy, the Pacific Rim, Canada, and Mexico, to name a few. “In the logistics business, as the world shrinks and as e-commerce continues to grow by almost double digits every year, reverse-logistics, returns-processing, and other operations like that become paramount. There are warehouses that are flourishing all over the country,” said Carpenter.
On to 2018!
What do commercial real estate, the restaurant industry, finance, the District Attorney’s Office, healthcare, manufacturing, senior care, and warehousing have in common? Local employees, a passion for supporting the community, and a desire to conquer new challenges that come their way. The road into 2018 certainly looks bright.