What’s inside? Ice cream, NAFTA and Obamacare

First things first: What is your favorite Stewart’s ice cream flavor? Mike Carpenter’s is blue raspberry (sherbet cooler)—blue tongue and all! Stephens Mundy goes for chocolate trifecta. Mary Carpenter said salted caramel is really good. And Gayle Alexander, with apologies, admitted she’s just a Philly vanilla woman. With Gary Dake, president of Stewart’s Shops, at our table it would have been a criminal cabal to not eat our figurative dessert first.

Dake went on to tell us the North Country is literally the crown jewel of his Stewart’s empire. “This area,” he said, “has actually outpaced the total company. We are seeing better growth here with a vibrant economy.” In 2016 the company’s capital budget was over $40 million—19 buildings between rebuilds and brand new structures. Other major projects involved phasing in chip readers for credit card machines and restructuring internal infrastructure to broaden product lines. As Dake sees the grocery side of the retail operation continue to
flatline and even drop, the company is shifting its focus toward increased food service, offering more grab-and-go meals. The exceptional gas margins seen in 2015 won’t be matched this year, with prices once again on the rise, but Stewart’s knows its market well and continues to thrive.

Where the Strictly Business forum is a great place for business leaders and public officials to get a sense for the overall state of things in the community, the bustling parking lots, well-used booths and familiar check-out lines at any Stewart’s Shop across the region are perhaps a better indicator of the state of our communities. “Hot & Fresh!” foods prepared behind the counter now replace the grocery aisle in many stores, pointing to fewer family meals shared at home. Dake’s team sees blue-collar workers sneak in for a lunch break beer and he has been forced to eliminate public restrooms in some stores due to frequent heroin overdoses.

Convenience stores have replaced the traditional supermarket in many small towns across the region; throughout the country a lack of grocery stores and farmers’ markets has created limited access to fresh, whole foods in the nation’s most rural and impoverished towns. Gayle Alexander, vice president of Denton Publications and Sun Community News, is concerned about these food deserts and the future of our local communities.

After a new branding initiative this year, Sun Community News is now the face of the North Country’s most read community newspaper. The papers are mailed free, and beginning January 2017, every home in the city of Plattsburgh will receive a weekly issue. Going hyperlocal has allowed Denton to create different pockets of news coverage in various communities, while still acting as a blanket to cover news for the entire North Country. With journalists on the ground focusing on eight different areas from Ticonderoga to Rouses Point, the Denton team has the ability to become the true eyes and ears of the region. And if the product continues to give regular advertisers a worthwhile return on investment, Denton Publications can lead the narrative to help manifest the kinds of wholesome, well-fed, well-read communities Alexander envisions for this region.

It’s easy to compare the problem of food deserts to the news deserts being created throughout the country by the corporatization of daily newspapers. For decades newspapers were the reliable source for local and regional news—the true “auditors of democracy,” as noted in a study by the University of North Carolina School of Media and Journalism about the extinction of daily newspapers. Alexander referenced the study, “The Rise of a New Media Baron and the Emerging Threat of News Deserts.” “There is nothing coming up to bridge that gap except community newspapers,” she said.

As publishers of Strictly Business and other various magazines for as long as anyone in the Plattsburgh business community can remember, Herb and Mary Carpenter have felt seismic shifts in the industry when it comes to the production, distribution and consumption of information. It has proved challenging over the last decade to keep up with the advanced technology and equipment needed to stay competitive in the printing business. Digital printing and outsourcing allows the local print shop to continue to service this market with quality design and customer service. This was a good strategic move for the diverse company, said Northeast Group president Mike Carpenter.

In the company’s warehousing and distribution operation, Carpenter moves clothing across America. The Northeast Group’s 350,000 square feet of production and warehouse space is part of one of the busiest and most efficient supply chain corridors in North America. The retail market NEG serves paints a clear picture of who in America is buying what. Gaging by the clothing and outerwear flying on and off Carpenter’s shelves this year, he can tell the upper middle class is doing well (spending money on high-end attire) and the lower to middle class shoppers are spending less on new clothes. He said growth is steady for items like socks and underwear. At least there’s that.

Nikki Mars, president and CEO of Mars Mechanical, sees a similar trend in the HVAC industry. “We’ve seen a lot of polarization within our clientele in regards to their ability to spend,” she said. Mars sees small local businesses operating on less and less. No budget for proper maintenance and upgrades means more patch and repair jobs. On the other side, Mars has seen an explosion of businesses that have the capital to spend on facility remodels, and for the individuals who run those businesses, an explosion in fine home design for HVAC. “Our business is going to go where the money is. That’s what any business has to do, but to witness the ever growing disparity is concerning to me as a member of this community,” she said.

Clients with bigger budgets in Mars’ world means more expensive outlays with better technology and often, greener systems. Steve Cacchio, president of Champlain National Bank (CNB), wondered if Mars’ clients were taking advantage of renewable energy tax incentives. “Those incentives are only good for a certain part of the population. You have to have the upfront capital to be able to invest, so it’s not evenly distributed,” Mars replied. From an investment perspective, Cacchio remarked that renewable systems—solar, geothermal, etc.—don’t add value to physical structures and are therefore empty investments for home and business owners, minus the cost recouped after energy savings. (And the part about saving the planet.)

Overall, Cacchio’s industry fared well in 2016. He took the time in his first full year as president of CNB to examine how the bank works, to “determine what we’re doing well and what we can improve on.” Champlain National Bank is a community bank with nine branches from Crown Point to Champlain and west to Lake Placid. “We are a regional player and are very dependent on what takes place here,” he said, noting a lack of substantial growth and the need to meet existing customers’ needs. Technology is driving the most notable changes at CNB. The organization has to offer the same dynamic product and service as everyone else. And, Cacchio said, “Information security is at the forefront of what we do. We spend a significant amount of time making sure we are secure.”

In the manufacturing sector, SpencerARL New York is closing out another great year, said operations manager John Vermette. He has been in the 3PL (third-party logistics) business in Plattsburgh for decades, first with Bombardier in the ’90s. He now oversees a combined 160,000 square foot facility with 254 employees, handling all the warehousing, subassembly, sequencing and logistics and local transportation for Prevost and Nova Bus. SpencerARL hit a milestone in the first quarter of 2016 with a two hour takt time at Nova Bus. (Takt time is the maximum amount of time in which a product needs to be produced in order to satisfy customer demand.)

Few understand the volatile industry like Vermette, and while it’s been a great year, he warned against the temporary nature of OEMs (original equipment manufactures) and related contract work. He said, “I don’t know how we got so lucky to have these big OEMs here, but they can move at the drop of a hat. These are just big empty buildings in a sense and it’s easy to move what they need out and relocate somewhere else if they can’t get the aid or if legislation changes that forces them to move.” In 2014 SpencerARL received $300,000 in performance-based tax credits through the Empire State Development Excelsior Job Program with an additional $435,000 CFA grant through New York State Homes and Community Renewal.

Vermette cautioned, “We’re established here in New York, but China is coming on heavy, and these OEMs need to figure this market out and get their recipe a little better before China gets an appetite for buses. And then they’ll go to inner city Boston and Chicago and promise jobs and state of the art facilities and they’ll get the contract.”

The table discussion turned to Bill Owens for guidance on how the new presidential administration will affect global trade and local business. In addition to his work at the Stafford Owens law firm in Plattsburgh, the former congressman works for the D.C. firm Dentons, the world’s largest law firm. Owens spent a lot of time in 2016 traveling throughout Canada giving speeches on the topic of fair trade. Don’t worry if you didn’t get a chance to hear one of his speeches or read his 21-page essay on investment arbitration under Chapter 11 of NAFTA published ear- lier this year in the Canada-United States Law Journal. He broke it down simply for us.

“When Trump talks about tearing up NAFTA, the result would be, for us, increased tariffs.” He said it is the Buy America provisions that are driving the growth we see in the transportation manufacturing industry, but other countries are catching on and creating similar provisions. Made in India, for example, stipulates that in order for Boeing to get a contract building Indian military jet fighters, substantial content must be made in India. Owens explained, “That sets up a whole series of activities where countries raise tariffs and require Made in ‘my country’ provisions.” He likened the situation to the Smoot-Hawly Tariffs of the 1930s. “It’s very dangerous water we’re treading and I don’t think the folks who are playing ball with Trump understand some of the ramifications. We have to be very aware because anything that negatively impacts NAFTA will impact us, unless it is counterbalanced with more Made in America businesses. The next six months are going to be unpredictable. We’re going to have to be in the position to adapt quickly.”

Owens and Stephens Mundy were up at 5 a.m. the morning of the Forum exchanging emails about repeal of the Affordable Care Act and the insurance industry.

CEO of UVM Health Network-Adirondack Region, Mundy has been guiding the hospital through remarkable transitions. His team has been challenged with moving into a model of prevention—a holistic shift that requires abandoning barely used infrastructure and systems and redirecting those investments toward not just caring for the sick but fostering a community of wellness. “I would predicate this,” he said, “it’s all the right thing to do for our families, parents and kids, but it’s been very difficult for our organization.” From a quality stand- point it’s all good news. Quality care scores for Accountable Care Organizations (ACOs) in the Adirondacks were in the top 10 percent of ACOs in the country, which, he said, “is a measure of quality across our region from Glens Falls to Champlain to Tupper Lake.” (ACOs are groups of doctors, hospitals, and other healthcare providers who come together voluntarily to give coordinated, high quality care to their Medicare patients.)

A great supporter of healthy community initiatives in his professional and personal life, Mundy has been proud to share Plattsburgh’s downtown revival with the first class of CVPH’s new Family Medicine Residency Program. The program is meant to help fill the predicted shortage of 100 physicians in the region by the year 2018. The mission is to attract, train and retain the next the generation of family physicians in the North Country. In a different kind of import/export commodity, Mundy said of the four new med- ical residents this year, three are from Canada. Of the 2,000 applicants for next year’s class, a third are from Canada. “We treasure the relationship between our two countries,” he said.

We began this conversation talking about favorite ice cream flavors, wound around mental illness and addiction, hit on global trade, healthcare and renewable energy— tough issues without easy answers. But every solution begins with a conversation. As leaders of this community, crown jewels each and every one, their openness and honesty at this Forum allows us all to learn, plan and help move the region forward in sustainable ways. Continued thanks to Herb and Mary Carpenter for being the voice of all that is good and positive in the Plattsburgh business community.