Worcester Business Journal

wbjournal.com | September 2, 2024 | Worcester Business Journal 21 Small towns as business incubators, part 1 BY JIM METCALF Special to WBJ S mall towns have undergone dramatic change, from being the center of the universe for area farms to be- coming isolated bedroom neighborhoods of larger city centers. As businesses close or move, Main Street be- comes a collection of empty storefronts. With a town not meeting their needs, more people look elsewhere. Town governments find it much more difficult to pro- vide services like education, police, and fire with primarily residential tax revenue, diminishing business taxes, and resident tension. Residents who work at locations outside of town oen feel like they are visiting the small hometown only for overnight and weekend stays. ey shop in strip malls on the way home or make weekend trips to box stores or entertainment locations. Others shop online, which increases their isolation. is leads to a decline in community life and pressure on town leaders to reverse the trend. A common approach for town governments is to recruit big corporate businesses, which promises jobs, taxes, and a good future. Trying to recruit big business is not easy. A large business can locate anywhere; therefore, it searches for the best deal in everything from highway access, utilities, and tax breaks. Towns oen negotiate from positions of weakness. is problem is not new or unique to your town. Hundreds of small towns have faced and, in many cases, solved the problem. e solution lies within the small town but is oen overlooked. As one unnamed town economic study committee reported, "Our economic development planning survey is attached. Note: We don't include farms, home-based, or mobile businesses." Who this town is overlooking are all the small businesses like farmers who produce fruits, vegetables, eggs, and honey and sell them in farm stands. ey are overlooking people who sell services like lawn care and home building. ey overlook musicians and bakers of cakes. People who babysit, teach cras and skills, and organize trips are overlooked. All the makers, artists, and craers who sell their creations online and in marketplaces are not counted. e truth is every small town can identify a hundred or more small and home- based businesses, which form an economic foundation of the community. Collectively, they can build the eco- nomic and social revival of the town and even attract new business ventures. EDITOR'S NOTE: is column is part of a three-column series by Jim Metcalf on small towns. To read the other two parts, see the Opinion Column section of WBJournal.com. Jim Metcalf is a SCORE Mentor in Central and Western Massachusetts. His work with the Worcester County Chapter of SCORE for the past 18 years has focused on small and home-based businesses in small and rural communities. e anti-WPI vitriol is not how we should do business Jim Metcalf O ne of the great things about the Central Massachusetts business community is it's a true community, where the play- ers all know each other, and as a rule, collaborative approaches to most issues rule the day. Like any other free market, our economy has plenty of competition, and organizations tend to act in their self-interest first; but they maintain a civil and cooperative vibe, unlike more cutthroat econo- mies like Wall Street or Silicon Valley. So, it was shocking to see Worcester city and business leaders fire a double-barrell shotgun blast at Worcester Polytechnic Institute over the college's plans to convert two hotels near its campus in the Gateway Park neighborhood into student housing. First came a sharply pointed and very public letter from the city's Economic Development Coordinat- ing Council, which is composed of officials from the City of Worcester, the Worcester Regional Chamber of Commerce, the Worcester Business Development Corp., and Massachusetts Biomedical Initiatives. e primary concern was the loss of city tax revenues, especially since significant public money was invested in the formerly underutilized site's environmental cleanup. en tourism agency Discover Central Mass. connected the loss of the hotel rooms to a weakening of the tourism industry, especially for larger events needings hundreds of rooms. Finally, the Worcester City Council took up the cause at its Aug. 27 meeting, excoriating WPI in every conceivable way. While the potential loss of $1.6 million in annual tax revenues and the reduction of hotel rooms has a real downside, the impact of WPI's plan is more nuanced. WPI is growing its presence in the city and increasing the city's housing stock, meaning fewer students competing for nearby apartments and home rentals in a city beset by a housing crisis. With con- struction costs rising since the COVID pandemic, the conversion of an existing hotel building into student housing likely offers savings from the construction of a new dorm. In addition, nearly 400 more hotel rooms in the development pipeline at proposed projects near Polar Park, Washington Square, and downtown would alleviate the loss of those Gateway Park rooms. Hotel operators in the city have cited lower-than-expected occupancy rates as a significant business challenge and barrier to expansion. In Worcester, we're not used to these disagreements spilling out into a public fight, which causes each par- ty to retreat further into hard positions. is should have been resolved without the vitriol. WPI does have the legal right to purchase property, but it has the re- sponsibility to be a positive presence in the Worcester community. To compromise, WPI and the City of Worcester should negotiate a higher payment in lieu of taxes beyond the current $815,000 annually, to make up some tax shortfall. e fervor of the pressure campaign against WPI may bear results, but it further isolates the institution from Worcester's leadership structure, which has a long-term downside. W The above Editorial is the opinion of the WBJ Editorial Board. The Viewpoint column, the A Thousand Words cartoon, and the Word from the Web commentary represent the opinions of their authors and do not necessarily reflect the views of WBJ or its staff. WBJ welcomes letters to the editor and commentary submissions. Send them to bkane@wbjournal.com. W

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