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Doyle oversees resurgence at Pleasant Valley Wine Company
Beer is made by men, wine by God. — Martin Luther I cook with wine, sometimes I even add it to the food. — W.C. Fields. HAMMONDSPORT — The popularity of grapes precedes recorded history. The sap of the grapevines was used to cure skin and eye disease, the leaves were used to […]
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Beer is made by men, wine by God.
— Martin Luther
I cook with wine, sometimes I even add it to the food. — W.C. Fields.
HAMMONDSPORT — The popularity of grapes precedes recorded history. The sap of the grapevines was used to cure skin and eye disease, the leaves were used to stop bleeding and even the inflammation caused by hemorrhoids, unripened grapes soothed sore throats, and raisins were administered to treat consumption and constipation. Ripe grapes were thought effective in treating cancer, cholera, smallpox, nausea, and kidney and liver disease. The most popular use of grapes, however, was in the making of wine. In 1996, 7,000-year-old wine-storage jars were discovered in northern Iran. Hieroglyphics from ancient Egypt and Mesopotamia portray vineyards and the skills of winemakers. The first written account of grapes and wine appears in the Epic ofGilgamesh, a Sumerian text from the third century B.C.E.
In the mythology of Mycenean Greeks, Dionysus, also known as Bacchus, was recognized as the god of the grape harvest, winemaking, and wine. The son of Zeus, he purportedly wandered the world teaching people the cultivation and wonders of wine. The Johnny Appleseed of ancient Greece is often depicted promoting the pleasure of drinking wine while riding in a chariot drawn by panthers and preceded by wild female followers and bearded satyrs or surrounded by a choir of nymphs. Assuredly, Dionysus would be pleased that wine is cultivated today on every continent except Antarctica.
Winemaking came to North America in the 17th century, brought by European colonists. The first winery in the Finger Lakes didn’t appear until the mid-19th century. “Charles [Davenport] Champlin established what is now the oldest winery in the Finger Lakes,” says Michael J. Doyle, the owner of the Doyle Acquisition Corp. and president of both the Pleasant Valley Wine Company and the Great Western Winery. “In 1860,” Doyle continues, “Champlin and 12 other investors … [put up] $10,000 to create the Pleasant Valley Wine Co. near Hammondsport, which was designated as ‘Bonded Winery No. 1’ in its state and federal districts. The first recorded shipment of 100 gallons of wine occurred in [August] 1862. Under the direction of the company’s two French winemakers, the Masson brothers, the winery produced 20,000 bottles of Sparkling Catawba in 1865 … Two years later, it was the first American sparkling wine to win a medal at a European Exposition.”
After nearly a century of ownership through Prohibition and two World Wars, the Champlin family lost control of the company in 1955 when it was sold to Marne Obernauer, a businessman from New Jersey. The Taylor Wine Co., the next-door neighbor of the Pleasant Valley Wine Co., bought the operation in 1962. The Coca-Cola Co. acquired the combined business (Great Western and Taylor) in 1977 and sold it in 1983 to Joseph E. Seagram & Sons. In 1987, Seagram’s sold the Taylor, Gold Seal, Great Western, Lake Country, Pleasant Valley, Taylor California Cellars, and Paul Masson brands to Vintners International Co, Inc. In 1993, Vintners sold all of its brands to the Canandaigua Wine Co. (now Constellation Brands) but retained its East Coast wineries, which Vintners subsequently closed. The ownership merry-go-round stopped in October 1995 when Doyle struck a deal with the owner of the Mercury Corp., a Hammondsport contract-manufacturer and assembler of metal, plastic, and electronic-components solutions, which agreed to purchase the sprawling complex. Mercury then occupied the former Taylor offices and its bottling and packaging facility, and Doyle leased the Pleasant Valley Winery with an option to buy.
“My friends and colleagues thought I was crazy,” muses Doyle, who first joined Pleasant Valley in 1976 as the Taylor Corporation’s general counsel. He was appointed president in 1980. “I came to Hammondsport from Rochester, where I had practiced labor and corporate law at Nixon, Hargrave, Devans, and Doyle (now Nixon, Peabody, LLP). What can I say? I fell in love with the place and the people. I left the winery late in 1989 after buying all of Vintners’ East Coast vineyards, which I then leased to the Canandaigua Wine Co. … It broke my heart to see the winery close. That’s when I partnered with Mercury to acquire the Pleasant Valley/Great Western property. I exercised my option to buy the Great Western Winery from Mercury in 2002.”
Thriving winery
Now, 13 years later, the business is thriving. Pleasant Valley Wine Co. employs 50 people and occupies 30 buildings encompassing 445,000 square feet. Its site at 8260 Pleasant Valley Road near Hammondsport (town of Urbana) is complemented by two additional retail locations — the Seneca Harbor Wine Center in Watkins Glen and the Caywood Vineyards in the town of Lodi, on the east side of Seneca Lake. Doyle owns about 1,500 acres, of which about 500 acres are planted with grapes. Doyle recently sold 185 acres at Caywood to his son Matthew, who manages the vineyards. The winery bottled more than 500,000 cases last year and has a storage capacity of 15 million gallons. Pleasant Valley Wine Co. generates between $5 million and $10 million in annual revenue. Doyle is the sole stockholder.
Doyle’s strategy hasn’t changed since he bought Pleasant Valley Wine Co. and the Great Western Winery: Leverage and enhance the existing, unique assets. “This business has four different revenue streams,” he notes. “each representing about a quarter of our sales: direct sales of our brands and sales through wholesalers and our own retail stores; bulk storage of wine and juice for other wineries; warehouse storage of customers’ bottled wines; and contract pressing, winemaking, and bottling. The last category is the fastest-growing part of our business, necessitating a $4 million investment in a new line that will fill, cap, and label 400 bottles a minute. The plan is to have the line operational in late 2015. I also plan next year to convert an old boiler room into a distillery, which opens up a whole, new line of possibilities for the company. I’m just a[n inveterate] dreamer: a guy with big ideas and [unfortunately] a small checkbook.”
Doyle is also considering converting unused space in the eight stone buildings listed on the National Registry of Historic Places, five of which were built in the 1860s. The structures resemble an old-world abbey with caves dug into the hillside. “It’s an architectural masterpiece done in Italian Renaissance style,” Doyle says, “nestled right here in the Finger Lakes. We also have a visitor’s center that includes a large museum that tells the story of winemaking in our region …. There is a lot of unused office space that could be converted into an inn or conference center, preserving the architecture while generating additional revenue. After all, the Finger Lakes is now a destination for [hundreds of thousands of] visitors who not only tour the more than 200 area wineries but also support its restaurants, hotels, and B&Bs. This region offers something for everybody, whether it’s boating, fishing, hiking, cycling, shopping, spas, museums, or weddings.” The Finger Lakes was recently ranked as the fourth-best wine destination in the country by TripAdvisor.
Growing wine consumption
Pleasant Valley Wine Co. is riding a national wave of increasing wine consumption. According to Liz Thach, a professor of management and wine business at Sonoma State University in California, wine consumption in the U.S. has increased every year since 2000. Statistics for 2014 include: 375 million cases of wine shipped (nearly 900 million gallons), revenues estimated at $35 billion to $38 billion, the number of wineries rose to 8,287, and wine consumption per-capita increased to 3.14 gallons per year. Sparkling wine nationwide, long a tradition at Great Western, was up 7 percent and is projected to grow in 2015. In Thach’s words: “Sparkling wine is hot.” Mark Twain put it more elegantly: “Too much of anything is bad, but too much champagne is just right.”
New York state is certainly part of the wine-consumption wave. As of April 11, Jim Trezise published in the weekly newsletter from the New York Wine & Grape Foundation that the state now boasts 400 wineries located in 59 of its 62 counties, 37 percent of which were added in just the past four years. He also reminded his readers that last year New York was number three in wine production, behind California and Washington, ranked number four in the number of wineries, and generated a total economic impact (grapes, grape juice, wine) of just under $5 billion. (The Wine and Grape Foundation claims that the industry attracted more than 5 million visitors in 2014 and supported 25,000 full-time jobs.) Wine Enthusiast magazine recently designated New York as the “2014 Wine Region of the Year.” It appears that New York consumers have adopted Louis Pasteur’s scientific aphorism: “Wine is the most healthful and most hygienic of beverages.”
The Finger Lakes has traditionally relied on Catawba, Delaware, and Niagara grapes, which tend to be sweet. The focus on vinifera grapes, beginning in the 1980s, has consistently raised consumer demand for chardonnay, Riesling, cabernet franc, merlot, and pinot noir grapes, which command a higher price. That was the motivation for Doyle to plant vinifera vines at Caywood Vineyards on Seneca Lake, as well as having a retail location on the Seneca Wine Trail, the most popular destination of the Finger Lakes wine tours.
“While there is a lot of attention on the European-style wines, I see a resurgence of consumption of sweeter wines,” observes Doyle. “These are the customers we have traditionally served. Our Gold Seal Catawba Pink and Concord; Widmer Lake Niagara; Brickstone Cellars Extra-Dry; Autumn Frost, Peach Chardonnay, Strawberry White Zinfandel, and Blackberry Merlot; Brickstone Cellars Vidal Ice Wine; and Chocolate Lab: All of our brands are selling well.”
Thach says 75 percent of all wine sold in the U.S. in 2014 was priced under $9 a bottle. That is Doyle’s sweet spot.
Doyle attributes his success to his employees. “There is a long tradition of winemaking at Pleasant Valley. After I reopened the plant, a number of veterans returned to continue the area’s history. There is no issue recruiting employees.” Doyle has also relied on outside professional companies to support his company. Visions Federal Credit Union furnishes financial services, William B. Joint of Bath provides legal advice, and Mengel, Metzger, Barr & Co., LLP handles the wine company’s accounting.
Doyle, 73, has been a leader in the New York wine industry for four decades. A native of Clinton, he graduated from Williams College in 1964, earned an M.B.A. from the University of Virginia in 1966, and his law degree from Syracuse University in 1972. He practiced law for four years in the Rochester area before moving to Hammondsport. His wife and partner of 40 years — Jana — died in 2007. Doyle’s three children and eight grandchildren all live in Upstate. Doyle lives in downtown Hammondsport.
This interview was conducted at the winery under the painting of the founder, Charles Champlin, who looked approvingly over Doyle’s shoulder. It’s not likely that the current president will promote the 155-year Pleasant Valley tradition in the Bacchanalian fashion by parading down Hammondsport’s main street in a chariot drawn by panthers and surrounded by admiring females and satyrs. But, in his own quiet way Mike Doyle is preserving the long history of Finger Lakes winemaking and the first bonded winery. The next generation is preparing to ensure the continuation of that tradition.
Norwich Pharma breaks ground on $26 million expansion
NORWICH — Norwich Pharmaceuticals Inc.’s management and employees, representatives of the parent company — Alvogen, regional elected officials, and the media assembled on April 28 for a groundbreaking ceremony for an expansion at the Norwich plant. Speaking to an audience of several hundred, Charlie Andrews, Norwich Pharma’s vice president of operations, noted that “[t]his is
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NORWICH — Norwich Pharmaceuticals Inc.’s management and employees, representatives of the parent company — Alvogen, regional elected officials, and the media assembled on April 28 for a groundbreaking ceremony for an expansion at the Norwich plant. Speaking to an audience of several hundred, Charlie Andrews, Norwich Pharma’s vice president of operations, noted that “[t]his is the first addition since the facility was built in 1976.”
The $26 million expansion to the north end of the existing structure will add 26,000 square feet to allow for the acquisition and installation of new processing equipment and to enhance the existing infrastructure. Andrews laid an ambitious timeline to complete the construction and installation — he expects the new addition to be completed in September 2016. A March 12 news release from Alvogen said “[t]his investment will allow us to acquire equipment upon which many of the newer drug products are being manufactured and sets us up to capture future business opportunities …”
Norwich Pharmaceuticals is a full-service contract development and manufacturing organization (CDMO), with the capacity to produce tablets, capsules, liquids, and semi-solids. It follows a strategy of developing and producing product for selected, third-party customers as well as for Alvogen. As the generic-pharmaceutical industry has become more of a commodity-based business, the Norwich CDMO is countering pressures on its operating costs by developing a more efficient and flexible operation.
Norwich Pharmaceuticals has positioned itself as a single-source provider from phase-1 product development through pilot-scale, clinical production, scale-up, registration, clinical services, and manufacturing. The company has two dedicated, approved areas in the plant for development and pilot-scale batch manufacturing that allow a direct transfer from the pilot plant to commercial operations, enabling customers a fast transition to the marketplace. With its focus on complex, solid oral-dosage and a flexible production environment, Norwich Pharma has carved out niches in the market that the proposed, new equipment will support. The firm’s competitive position is also enhanced by its designation as a foreign trade zone, which eliminates many of the hurdles in clearing a product through the U.S. Food & Drug Administration and Customs.
The company began in 1887 as Norwich Pharmacal Company. It introduced national favorites such as Unguentine, an antiseptic, surgical dressing, in 1893; Pepto-Bismol in 1901; and aspirin in 1907. In 1939, Norwich was listed on the NYSE. Procter & Gamble bought the company in 1982 before selling it to Outsourcing Service Group in 2001. AFI Partners, LLC, a private-equity firm and the holding company for Alvogen, acquired Norwich in 2007 and rebranded it as Norwich Pharma Services in 2013.
The current Norwich facility encompasses 359,000 square feet. With its addition, it will comprise 385,000 square feet. Sited on 400 acres just north of the city, the plant employs 277 people with an annual payroll of $25 million. CNYBJ estimates the company’s annual revenue at $80 million to $100 million.
Norwich Pharma is targeting a number of therapeutic areas for its growth: cardiovascular, central nervous-system, dermatology, oncology, endocrinology, infectious diseases, nutrition, and respiratory.
Alvogen, which has more than 350 generic products on the market and more than 200 development projects in the pipeline, is a multi-national pharmaceuticals company with commercial operations in 34 countries. The company has five manufacturing plants; Norwich is the only American facility. Alvogen, which employs 2,300, is focused on developing, manufacturing, and distributing generic, brand medicines, biosimilars, and over-the-counter products. Chris Young, Alvogen’s executive vice president, global-supply chain, who also spoke at the groundbreaking, said, “… [Our] aim is to become a top-10 [industry] player. Our vision is to become the pharmaceutical company of tomorrow, setting a new standard by combining our collective experiences and understanding our customers’ needs … This means creating a lean, flexible, multi-national operation. Our success is dependent on three things: recruiting outstanding talent, building on our U.S. platform, and continuing to develop a complex portfolio.”
AFI Partners is a private-equity firm that makes control and non-control investments in small and middle-market companies undergoing change. On its website, the company touts its flexible capital and experience with special operations to source proprietary deal flow and to help businesses with leading product- and service-offerings to manage growth and to turn around underperformance. AFI prefers to invest in U.S.–based businesses with under $250 million in revenue, focusing on New York and the Midwest. The equity-firm targets the following industries for investment: automotive, metals, chemicals, paper, transportation, building products, pharmaceuticals, aerospace/defense, mining, plastics/packaging, and energy/power.
Andrews, who has been at Norwich Pharma eight months, has more than 20 years of experience in the pharmaceutical industry. Prior to joining Norwich Pharma, he worked at Abbott Laboratories, Cardinal Health, and Endo Pharmaceuticals. In addition to Andrews, the leadership team at Norwich Pharma includes Ric Festarini, vice president of human resources; Dr. Kristin Arnold, Ph.D., vice president, product development and technical services; Christina Siniscalchi, site director U.S. quality; Tami Watson, director supply chain; Michael Kriever, controller; and John Bender, vice president commercial operations.
Housing Visions, HCR start work on Salina Crossing
SYRACUSE — The properties targeted in the Salina Crossing development project include 823 N. Townsend St, described as “historic” and constructed in 1887. The structure, first built as an Independent Order of Odd Fellows Lodge, later became the Ernie Davis Center for adolescent boys. The Sunrise Community Center occupied the structure from 1981 to 1991,
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SYRACUSE — The properties targeted in the Salina Crossing development project include 823 N. Townsend St, described as “historic” and constructed in 1887.
The structure, first built as an Independent Order of Odd Fellows Lodge, later became the Ernie Davis Center for adolescent boys. The Sunrise Community Center occupied the structure from 1981 to 1991, but by 2000, the building stood vacant.
The Salina Crossing development includes plans to renovate the building into a 9-unit apartment complex, according to a brochure about the project.
The full project is a mixed-used development that will create 49 housing units for low-income households and nearly 6,000 square feet of commercial space.
Housing Visions Consultants, Inc. and New York State Homes & Community Renewal (HCR) have started their work on Salina Crossing.
The two organizations on May 1 held a ceremony at 900 North McBride St., where the Otisca Building, which once housed a brewery, previously stood.
They also distributed a news release with project details later in the day.
The new construction at 900 North McBride St. will include 20 one-bedroom units and nearly 4,700 square feet of commercial space, according to the brochure.
The $14.8 million project will serve the residents of two “distinct” neighborhoods that Salina Street, a street that spans the Northside and Southside of Syracuse, connects, the release stated.
The development will “substantially” rehabilitate four existing buildings and construct six new buildings to “remove blight and catalyze further investment” in Syracuse’s Northside and Southside neighborhoods, the organizations said.
Besides 900 North McBride and 823 N. Townsend, the Northside properties include a second on North McBride Street property, another on North Townsend Street, and one on Hawley Avenue.
The Southside properties include three on McLennan Avenue and two on South Salina Street, according to a fact sheet on the project.
“We’re able to take on several vacant buildings on the South Side, tax delinquent, demolish them. We’re going to replace … with some high quality housing, as well as some mixed use commercial space,” Benjamin Lockwood, vice president of business development at Housing Visions, said in his remarks at the event.
The plans also include a new, mixed-use building at 2223 S. Salina St. with apartments and 1,200 square feet of commercial space, a leasing office, and resident community room.
Altogether, the project seeks to turn 10 “dilapidated” properties and vacant lots into 49 housing units and 5,895 square feet of commercial space, according to the release.
The completed development will provide a mix of 27 one-bedroom, 11 two-bedroom, 6 three-bedroom, and 5 four-bedroom units.
Five units will accommodate persons with mobility impairments, and two additional units will be adapted for those with hearing and/or vision impairment.
People with traumatic brain injury (TBI) will have access through priority leasing to eight units in Salina Crossing, the organizations said.
Holmes King Kallquist & Associates, Architects has designed the development to meet Leadership in Energy & Environmental Design (LEED) and NYSERDA Energy Star certification.
NYSERDA is short for New York State Energy Research and Development Authority.
Housing Visions Consultants, Inc. will serve as the general contractor on the project.
New York State Homes & Community Renewal in 2014 awarded the Salina Crossing development $900,000 in annual low-income housing tax credits as part of
Gov. Andrew Cuomo’s $1 billion House NY initiative “to build and preserve affordable housing and revitalize communities.”
The City of Syracuse also provided $800,000 to help fund Salina Crossing.
Other funding partners include New York Housing Trust Fund Corporation and the Community Investment Fund, both of which are part of HCR; Chicago, Ill.–based National Equity Fund, Inc.; and Cleveland, Ohio–based KeyBank, which ranks third in deposit market share in Central New York.
Manufacturing Careers Partnership begins recruitment in June
DeWITT — Recruitment will begin in June for the first pre-apprenticeship training program in the Manufacturing Careers Partnership. CenterState CEO’s Work Train program describes it as a “new workforce-development initiative.” The organization announced the Manufacturing Careers Partnership at Darco Manufacturing at 6756 Thompson Road in DeWitt and in a news release issued April
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DeWITT — Recruitment will begin in June for the first pre-apprenticeship training program in the Manufacturing Careers Partnership.
CenterState CEO’s Work Train program describes it as a “new workforce-development initiative.”
The organization announced the Manufacturing Careers Partnership at Darco Manufacturing at 6756 Thompson Road in DeWitt and in a news release issued April 30.
The program will provide training for unemployed and underemployed area residents and link them to entry-level employment in the manufacturing industry.
The Manufacturing Careers Partnership anticipates working with 40 to 60 people through December and “will build capacity to train and advance 300 workers through 2017,” CenterState CEO said.
New York State Assemblyman Al Stirpe (D–Cicero) secured $1.2 million in state-grant funding for the initiative.
“People who go through this program are going to walk into a job as soon as they’re done, and that’s probably the best thing that I can say about the whole program,” Stirpe said in his remarks during the April 30 announcement.
The partnership seeks to “align a reemerging manufacturing sector in the region” with a pool of untapped talent in the region, according to CenterState CEO.
“We’ve talked to employers across the Central New York community who all say they can’t hire enough workers quickly enough to keep up with the pace of growth,” Dominic Robinson, director of Work Train, said in his remarks at the announcement event.
The community has “countless” men and women who want to work but are “disconnected” from opportunity, he added.
“I am confident that we will be good stewards of the resources that Assemblyman Stirpe has provided to us and that at the end of this process, we will have put a lot of good people to work and we will have supported a lot of really good companies in this region,” Robert Simpson, president and CEO of CenterState CEO, said in his comments at the event.
The program will initially target residents of Onondaga County to address workforce needs for entry-level workers at “traditional” manufacturers, CenterState CEO said.
After establishing the pre-apprenticeship program as a “strong foundation,” the partnership will develop subsequent programs and resources to address “higher-skilled positions over the long term,” with expanded programs to support workforce needs within the advanced-manufacturing industry, as described in the CenterState CEO release.
Manufacturing input
All programs that the partnership develops are “designed to employer specifications, based upon employer input.”
The program is “important to us” because it requires more than what people might think of as “traditional” training programs. Casey Crabill, president of Onondaga Community College, said in her remarks at the event.
“We’re going to be building curriculum that’s based on the needs of employers, so we’ll know what skills have to be displayed by folks who are looking for work, at what level, under what time constraints, to what level of accuracy,” she said.
SUNY’s Syracuse Educational Opportunity Center will serve as the host site of the pre-apprenticeship program, according to CenterState CEO.
The curriculum will also incorporate feedback from industry groups, such as the DeWitt–based Manufacturers Association of Central New York (MACNY) and the Salina–based Central New York Technology Development Organization (TDO).
Randy Wolken, president of MACNY, said the program is “music to my ears.” The organization represents more than 300 companies that all seem to be focused on “one consistent theme,” according to Wolken.
“Will I find the workforce of today and tomorrow — because if I don’t, I may have to be in North Carolina or Mexico or China,” he said.
Darco Manufacturing, through its partnership with On Point for Jobs, has hired eight entry-level workers in the last eight months, Laura Miller, general manager of Darco Manufacturing, said.
Only one of the workers had experience working in a manufacturing setting, she added.
Miller credited programs like On Point for Jobs, which helps Darco when it gets “hit by orders, as things slam us.”
“I’m able to say … bring those people in, let’s talk to them and that’s when it happens. Then, we figure it out later, we sort it out,” said Miller. That’s why Darco supports the new Manufacturing Careers Partnership.
On Point for Jobs is part of the nonprofit On Point for College, which operates an office at 1654 W. Onondaga St. in the Catholic Charities building.
“It takes a community-wide approach. It takes a systemic approach. And that’s what this … is all about,” Robinson said.
Work Train, a collaborative that CenterState CEO leads and administers, is spearheading the Manufacturing Careers Partnership. Local foundations and local and state-government funding help pay for the Work Train collaborative, CenterState CEO said.
Work Train says it brings together partners to develop workforce programs that meet the needs of area employers and unemployed and underemployed workers.
Work Train seeks to connect community members to jobs that “show persistent and robust demand for workers” and “opportunities for career advancement,” according to the release.
Work Train’s model builds on CenterState CEO’s pilot programs, Green Train and Health Train.
Study details revenue growth at New York independent agencies
DeWITT — Two-thirds (67 percent) of New York independent-insurance agencies grew their revenue in 2013 compared to 2012, with the average revenue growth at 14 percent. By comparison, 70 percent of independent agencies nationwide grew their revenue in the same time period, with an average revenue growth of 20 percent. That’s according to
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DeWITT — Two-thirds (67 percent) of New York independent-insurance agencies grew their revenue in 2013 compared to 2012, with the average revenue growth at 14 percent.
By comparison, 70 percent of independent agencies nationwide grew their revenue in the same time period, with an average revenue growth of 20 percent.
That’s according to an analysis of New York agencies that participated in the 2014 Agency Universe Study.
Future One sponsored the survey. Future One is a collaboration involving the Alexandria, Virginia–based Independent Insurance Agents & Brokers of America, Inc. (IIABA) and other insurance companies that do business through the independent-agency system, according to the IIABA website.
The DeWitt–based Independent Insurance Agents & Brokers of New York, Inc. (IIABNY) released the New York analysis on April 23.
IIABNY is a trade association that represents independent-insurance agents throughout New York.
Future One conducts the survey to sample the views of independent agents nationwide and to see how the industry is performing nationally.
“It is the definitive study relative to the number of independent insurance agencies in the [U.S.] and the profile of those agencies,” says Richard (Dick) Poppa, president and CEO of IIABNY.
Poppa spoke with CNYBJ on May 4.
The 2014 Agency Universe Study found New York insurance agencies “achieved greater revenue even while facing a difficult economy,” according to the IIABNY news release.
They reported revenue growth “despite the lingering effects of the 2007–09 recession and an economy that has lagged the rest of the country in recovery, particularly in the upstate counties.”
Agencies can grow their revenue in two ways, says Poppa.
“One is through new client acquisition and then the second is … the clients themselves having growth in their businesses,” he explains.
As a business of any kind grows, Poppa says, its insurance needs increase. For example, if a company adds more employees, it will to need more workers’-compensation insurance and perhaps more health insurance.
“For us, it’s a very positive reflection on the productivity of independent-insurance agencies, the resilience of independent-insurance agencies,” says Poppa.
The New York analysis also found that the state’s agencies are “fixtures” in their communities.
The study found 55 percent of New York agencies have been in business at least 45 years. One-fifth of them started business before World War II.
In the rest of the country, 30 percent are 45 years or older and only 13 percent pre-date the war, according to the IIABNY news release.
The analysis also found that New York independent agents like to work with New York–based insurers.
Compared with their peers outside the state, the percentage of New York agencies representing large national companies, such as Progressive, Travelers, and
The Hartford, is “substantially less,” according to the IIABNY news release.
Large percentages of New York agencies represent local insurers such as Utica National Insurance Group, Buffalo–based Merchants Insurance Group, Dryden Mutual Insurance Company, and Edmeston, New York–based NYCM Insurance, the trade association said.
New York data
IIABNY last June asked IIABA, the national organization, and Zeldis Research Associates, a Pennington, New Jersey–based research firm, if they would extract
data specific to New York state agents and compare it to the national study.
The information that IIABNY released was based upon a New York sample pulled from the overall national Agency Universe Study, says Poppa.
Zeldis started its work with the online survey in the fall of last year and finished gathering data early in 2015, he says.
In order to provide as “rich” data on New York agents and brokers as possible, the IIABNY communicated to its membership the importance of responding to the
2014 Agency Universe Study.
“We wanted to make sure that we got enough responses that it was going to be statistically valid,” says Poppa.
Nearly 280 agents responded, compared to the 111 responses to the 2012 study, the IIABNY said. The organization didn’t take “special steps” to encourage responses to the 2012 study, it added.
Researchers have conducted the survey once every two years over the past decade, Poppa believes.
Study participants included 22 agencies from New York City, 114 from Long Island, 35 from downstate, and 108 from upstate counties, according to the study.
CH Insurance gets “Kreative,” adding new wellness program to benefit offerings
SYRACUSE — CH Insurance Brokerage, Inc. of Syracuse is partnering with Long Island–based Kreative Health Solutions, Inc. to include its health and wellness program in its employee-benefit offerings. The program includes the Kreative Care Network, which Kreative describes as an “educational hub for anything you ever wanted to know about health.” It’s an
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SYRACUSE — CH Insurance Brokerage, Inc. of Syracuse is partnering with Long Island–based Kreative Health Solutions, Inc. to include its health and wellness program in its employee-benefit offerings.
The program includes the Kreative Care Network, which Kreative describes as an “educational hub for anything you ever wanted to know about health.”
It’s an online health-education platform “that integrates into the job without disturbing your work flow,” according to a YouTube video about the Kreative Care Network.
The program is “customized to the needs” of a customer’s “living and working environment,” according to an April 14 CH Insurance email about the partnership.
CH said that it’s making the service available to its clients “at no cost.” It is offering the service to its customer “prospects” as well, says Joseph (Joe) Convertino, Jr., president and co-owner of CH Insurance.
Convertino, along with Steffen Rowe, CEO of Kreative Health Solutions, and Jarod Cervoni, Kreative’s chief director of new business development, spoke with CNYBJ at the CH Insurance office on May 4.
“I think it’s a good retention piece [for] our clients because I think they’re doing this without us knowing it,” says Convertino, noting they could be conducting online research on the topic.
The two organizations started discussions because David Wicker, a CH Insurance account executive, knows Jarod Cervoni.
CH Insurance started discussions with Kreative Health Solutions in late 2014 and finalized the deal on April 1, Convertino says.
“It’s very easy to access them and give our clients and their employees access to their product,” says Convertino.
CH Insurance implemented the program after Easter, says Convertino.
CH Insurance is paying Kreative Health Solutions to provide the health and wellness service, but Convertino declined to disclose the cost.
The firm is using its own assets to cover the cost, he noted.
“When you have a healthy and energetic workforce, I think it helps overall in the company with … morale, with workers’ compensation … and [cheaper] health-insurance premiums,” says Convertino.
“The biggest challenge wellness programs have is that people don’t use them,” says Rowe. “We negotiated terms so that we would have limited curriculum to offer them.”
Kreative set up five classes that CH Insurance felt were “most pertinent to their clients,” says Rowe.
The online classes focus on nutrition, weight loss, smoking cessation, high intensity interval training, and workplace ergonomics, a class described as a “must for anyone who spends the day sitting.” in
As of May 4, CH Insurance had five clients that have already taken advantage of the wellness program, says Convertino.
About Kreative
Kreative Health Solutions is a corporate and community wellness company, says Rowe, the firm’s CEO.
“Essentially what we’re dedicated to doing is helping build more functional people both at work and at home and in their community,” says Rowe.
Rowe is a graduate of Binghamton University and a former member of the school’s wrestling team, according to company marketing materials provided to CNYBJ.
Rowe and Cervoni launched the company in May 2014, each having owned separate corporate-wellness businesses before Kreative Health Solutions.
Cervoni still operates Business Fit Solutions, which is headquartered in Binghamton, but it’s on the “back burner” as of now.
The company that Rowe previously owned, called Wishing Wellness, worked with doctors, so he has a “very expansive” network of doctors, he says.
Rowe lives on Long Island, and Cervoni lives in Liverpool. They hope to open a brick and mortar location in June, perhaps in DeWitt, but they haven’t made a final
decision on the site.
Even without its agreement with CH Insurance, Kreative had been considering the possibility of a location in the Syracuse area.
“We like the geographic area of Syracuse, [which] allows us to hit all of Central New York,” says Cervoni.
Kreative currently employs 15 full-time workers, along with about 100 contract employees, says Rowe.
The firm has plans to open two corporate-wellness centers, including one in Syracuse, and each will include obstacle courses inside.
The centers could triple the number of full-time workers the company employs, says Rowe.
A look at CNY Millennials in the Workplace
SYRACUSE — Right now, there are 73 million Millennials in the United States between the ages of 18 and 34, according to the latest Census data. The Central New York Business Journal looked at a slice of this generation right here in Central New York. Renee Downey Hart, a professor at the Madden School
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SYRACUSE — Right now, there are 73 million Millennials in the United States between the ages of 18 and 34, according to the latest Census data. The Central New York Business Journal looked at a slice of this generation right here in Central New York.
Renee Downey Hart, a professor at the Madden School of Business at Le Moyne College, has conducted more than 25 years of research on generations. She says her research on Millennials is her most requested presentation.
Hart summarizes Millennials like this: “They want to learn. They want respect. They want technology that is up to speed. They want to be included. They want you to have a conversation with them about what’s happening and they want their ideas not to be judged as, ‘Oh that’s the 24 year old,’ but [as] ‘Oh that’s somebody that has technological capacity, and maybe I can learn from it.”
Hart’s research shows Millennials in the workplace thrive off feedback. She says it’s important for organizations to understand this is the way that Millennials prefer to work and respond to it.
“And I say to people, would it kill you when you have someone who is 25 years old who just finished a project, to wander into their office and say, ‘Hey, thank you for this. This is what went really well. Here’s some other feedback I would like to give you.’ They are hungry for that. And without that, they will leave you,” says Hart.
Erica Muscetello, a 27-year-old marketing manager at Dermody Burke & Brown, CPAs, LLC in Syracuse, says her boss, Pennie Gorney, director of marketing, gives her what she needs to succeed.
“She is open to communication and we are always giving each other feedback on a daily basis. It’s not where you have your one annual review at the end of the year; it’s just constant feedback, constant learning. You know what you are doing wrong, what you are doing right,” says Muscatello.
Millennials want more opportunities than a typical 9 to 5 job. John Neri, a young professional at M&T Bank, exemplifies this.
”Success to me is being well balanced, right. So, I want to be able to have my Bruce Wayne job in the bank but my Batman job is DJ’ing. You know what I mean?,” he quips.
“I like to have different elements of who I am,” says Neri, who is a business development officer for M&T in Central New York.
According to Hart’s research, learning to communicate with Millennials is important in maintaining the workforce. Millennials now make up one-third of all workers.
Employers need to make a connection with prospective employees from this generation starting at the job interview.
“If there’s anything to remember when a Millennial is sitting in front of you in an interview, it’s to appreciate that they’re tech savvy. They need feedback in real time … And, they want to be part of something that matters,” says Hart. “So, what is it that your organization does that matters, and share that with them in the interview.
And see if you can get them to be on board. People are most successful when they’re passionate about what they’re doing. And, this is a passionate generation.”
Survey: More tax-exempt health-care organizations compensate independent board members
In an environment experiencing significant organizational change, new practices regarding health-care executive compensation are beginning to emerge, particularly pay for board members. According to the global consulting firm Mercer’s “Executive Compensation Policies and Practices Survey for Tax-Exempt Health Care Organizations,” one-fourth (25 percent) of health-care organizations are paying their board members and another 7 percent
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In an environment experiencing significant organizational change, new practices regarding health-care executive compensation are beginning to emerge, particularly pay for board members. According to the global consulting firm Mercer’s “Executive Compensation Policies and Practices Survey for Tax-Exempt Health Care Organizations,” one-fourth (25 percent) of health-care organizations are paying their board members and another 7 percent are considering doing so.
“Standards developed for for-profit organizations are migrating into the tax-exempt sector,” Deb Bilak, a partner at Mercer, specializing in board compensation, said in a news release. “Hospitals and health systems are facing significant challenges around health-care reform, and as a result, the role and expectation of board members are changing. Similar to what we’ve seen in the private sector, as board complexity increases, so does the need for specific expertise — and compensating board members has been a common practice for recruiting and rewarding competencies, vision, and time commitment.”
Mercer said its survey, which was conducted late last year, examines the executive-pay programs of more than 50 health-care provider, health-plan, and managed-care organizations across the U.S.
Incentive plans continue to be an essential component of executive-compensation packages among health-care organizations, the survey found. Most (93 percent) provide an annual incentive plan for executives and almost half (45 percent) offer a long-term incentive plan. Of those organizations that provide an annual incentive plan, few include a clawback provision or contractual stipulation that allows for paid compensation to be rescinded based on restated financials or other factors. Although fewer organizations provide long-term incentive plans, one-fourth (25 percent) of those that do have a clawback provision.
“There is a major shift in the role of hospital executives from building services and partnering with physicians to creating a culture that addresses patient care and high-value outcomes,” Tom Flannery, a partner at Mercer, specializing in executive compensation, said in the release. “A robust compensation package for hospital executives reflects that of executives in the private sector and helps retain qualified talent that might flee to more lucrative positions in for-profit companies.”
Pay for performance
With the continual focus on pay for performance, health-care organizations have been facing increased pressure to ensure executive-incentive plans are aligned with company performance. While companies use a variety of strategies ranging from discretion of compensation committees to quantitative metrics to set performance goals, Mercer’s survey reveals that nearly two-thirds of health-care organizations rely on a mix of both internal and external standards for establishing performance targets for their annual and long-term incentive plans.
“Running a hospital or health-care system is a complex job and health-care organizations have been trying to improve their executive pay practices accordingly,” Bilak said in the release. “The incentive plans associated with variable pay are important tools for rewarding effective management. Following suit of the for-profit sector, it behooves hospital executives and their board members to adjust compensation to the times and even ensure transparency exists in the process.”
Related to compensation, Mercer’s survey shows the use of tax gross-ups — payments made to increase a net amount to account for taxes that would be incurred by the receiver — continues to decline. Just 8 percent of health-care organizations provide tax gross-ups to CEOs or other executives, and 40 percent of those organizations with tax gross-ups are planning to eliminate them.
What others dream about, WISE women do. On April 21, the women Igniting the Spirit of Entrepreneurship (WISE) Symposium hosted its 13th annual event. More than 900 aspiring entrepreneurs who desire to attain success and significance attended the event at the Carrier Dome on the Syracuse University campus. Over the past decade, WISE has
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What others dream about, WISE women do. On April 21, the women Igniting the Spirit of Entrepreneurship (WISE) Symposium hosted its 13th annual event. More than 900 aspiring entrepreneurs who desire to attain success and significance attended the event at the Carrier Dome on the Syracuse University campus.
Over the past decade, WISE has been synonymous with entrepreneurial excellence and has grown to become the premier event not only for up-and-coming entrepreneurs, but also for anyone active in the business community. That includes corporate people, aspiring entrepreneurs, startups, growth business owners, and anyone interested in networking with smart, savvy women in business.
The attendees had the opportunity to gain wisdom from more than 20 business experts during workshops and speeches covering topics including productivity, leadership, building your business, breaking bad habits, managing your time, making life maps, branding, developing sales skills, using social media, and discussing how to get what you want in business and life — to name a few.
The WISE Connections Café was open all day with 28 business experts available to sit one-on-one with attendees to help them solve their business challenges and advise them on how to succeed in their business.
Walking the event, I witnessed groups of two, three, or more women networking in deep conversation with each other. I could overhear them helping each other with ideas and leads to succeed in their business.
More than 100 local vendors were on site, offering products and services to help the attendees in their businesses and in their lives. While eating lunch, it was exciting for me to see these women sit down as strangers, exchange cards, offer help to each other, and leave as friends.
Last year after the WISE Symposium, 77 percent of the attendees reported increased sales, and the event reached 7.1 million people on the Twitter hash tag #WISE2014.
I have traveled 1,500 miles and spent more than $1,600 to witness and partake of events as exciting and as productive as the WISE Symposium. It’s amazing that there is an event like this in our own backyard that can be life changing, where you can visit experts from a variety of businesses, and learn ideas and concepts that can help you to succeed — all for just $100. Wow, talk about a fantastic bargain with the opportunity to learn and grow your business. What about you and your business next year? Are you going to become WISE?
James McEntire is founder and owner of JM Sales Consulting, a company that says it provides training and coaching for those who want to excel in sales. Contact him at (315) 761-3208, or visit his website at http://jmsalesconsulting.com
Key role for board, audit committee members: Ask smart questions
As an auditor, I’m asked a wide variety of questions, and I welcome those inquiries from my clients. As in any productive relationship, communication with your auditor is not only helpful, but also the cornerstone of working together effectively. Certain communications are required, and should be proactively addressed by your auditor. Top topics of
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As an auditor, I’m asked a wide variety of questions, and I welcome those inquiries from my clients. As in any productive relationship, communication with your auditor is not only helpful, but also the cornerstone of working together effectively.
Certain communications are required, and should be proactively addressed by your auditor. Top topics of discussion range from difficulties performing the audit, to highlights of key estimates and sensitive audit areas, to accounting adjustments resulting from audit procedures performed.
While these required communications are a good jumping-off point and can lead to an excellent dialogue, a board of directors should be prepared to ask more questions. In cases where an audit or finance committee is in place, these discussions should begin in that setting. These committees are responsible for, among other things, overseeing and evaluating the audit process and assisting the organization in addressing financial-reporting risk.
I would suggest that at a minimum, the audit committee (or finance committee if an audit committee doesn’t exist) consider asking the external auditor the following questions:
ν What are the biggest risks regarding financial reporting facing the organization in the next year and over the long term?
ν What steps do you believe the organization should take to address those risks?
ν How does your firm assess our risk-management process over financial reporting?
ν What are the high-risk areas of the audit and how were these addressed in the audit?
ν What observations do you have about management’s documentation and assessment of the internal-control structure?
ν Have you discussed any observations for improving internal controls with management? What was the substance of those conversations?
ν Are you aware of any circumstances where management failed to demonstrate commitment to the highest ethical standards?
ν What role, if any, did your firm have in management’s preparation of the financial statements?
ν Are there any areas of the financial statements that are difficult to understand or where we could provide more clarity to help a user better understand the financial statements?
ν Is there anything going on within the organization that you believe warrants further investigation?
And finally:
ν Are there any questions we have not asked that should have been asked? If so, what are those questions?
This final question is one of my favorites, and an effective tool for any oversight committee. You see, it may be difficult to cover all the bases and have a clear view of the auditor’s perspective unless you ask directly, “What are we missing?” This is a powerful tool indeed.
Some of these questions may be covered in general conversation, while others are best held for discussion in what is called an “executive session.” During an executive session, staff are excused and “those charged with governance” have the opportunity for open dialogue with the external auditor. You might ask, “What’s the point?”
Typically, auditors work with the management team to gather audit evidence, understand accounting applications, and assess the propriety of financial reporting. But auditors do not work for management. The auditor has a direct responsibility to those individuals charged with governance. Sometimes this is a board of directors or perhaps a plan trustee or business owner. It’s whoever is charged with ultimate responsibility for the organization.
During the course of communication with your auditor, you should also expect to hear about industry trends and suggestions on how things could be done better. And while no one likes to hear about an error or deficiency, let’s face it — things happen. It’s always better to know where improvements are needed and be able to take action.
Look forward to meeting with your auditor, and remember, questions are not just for fun; they are your responsibility.
Gail Kinsella is a partner in the Syracuse office of The Bonadio Group accounting firm. Contact Kinsella at gkinsella@bonadio.com
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