Worcester Business Journal

10 2016 Economic Forecast www.wbjournal.com Worcester Business Journal 2016 ...and what actually happened Our prediction... Worcester officials will find a developer for the former courthouse building in Lincoln Square. New Hampshire developer Brady Sullivan Properties bought the vacant courthouse for $1.2 million and plans to turn it into 115 apartments with 3,000 square feet of retail space. } 4 We were sort of right on this one. e final $38-billion state budget did include a plan to reduce the corporate tax, but it was delayed to expand the earned income tax credit } The Massachusetts Legislature, although still heavily Democratic, will approve at least one of Governor-elect Baker's tax-cutting plans for businesses. 4 } More colleges will broaden their online course offerings, largely amid increasing demand from students. But it will also help them hold the line on costs. is might have been the biggest no-brainer of all the predictions, as nearly every college expanded its online course portfolio. Mount Wachusett Community College was the latest, creating a mostly online accelerated business track program in November. } A mutual bank in Central Massachusetts will seek state approval to sell stock. A big swing and a miss on this one. Instead, the banking trend in 2015 turned out to be mergers between community banks. } Despite the drop in oil prices in 2014, use of the fuel in Massachusetts will not rise, while use of renewable energy sources such as solar and wind will gain. e use of the oil as fuel in power plants remained the exact same in 2015, comprising 19 percent of capacity. e use of renewables increased from 16 percent to 18 percent. } Economic growth in Massachusetts will struggle to reach 3 percent as interest rates rise, making it more expensive for businesses to borrow money. Although better than the national average, Massachusetts never really shied above 2-percent growth. Interest rates largely remained stagnant. } More Central Massachusetts communities that tax business property at higher rates than residential property will work toward narrowing that gap. Not everyone followed suit (we are looking at you, Worcester!) but 11 of the 17 communities with dual tax rates narrowed the gap, including Sturbridge, which went back to a single rate for businesses and residents. 8 } It turns out, the move of GE Life Sciences to Marlborough didn't kick off a westward exodus from Boston. Industry officials remain optimistic Central Massachusetts will accommodate these firms' needs as they grow into bigger spaces, but regional firms now are coming from incubators. A life sciences firm will relocate from inside Route 128 to Greater Worcester as the city builds on some advantages to attract companies in that industry. } Hospitals in Central Massachusetts will continue to lop off non-acute services that they believe would be better handled by smaller specialty providers. Instead of eliminating in-house services, the region's hospitals partnered with specialty providers to bring more of those services into their systems. } The 495 corridor will continue to see a drop in office and industrial vacancy rates. e office vacancy rate around 495 dropped from 22.3 percent to 20.9 percent in the last year. It still remains the highest between Worcester and Boston. 4 4 4 8 4 8 4

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