State Treasurer Visits Businesses Aided By Loan Program
Steven Grossman, center, also chairman of the state School Building Authority, took a tour of Taconic High School with Superintendent Howard Eberwein III and Mayor Daniel Bianchi.
The banking partnership, begun in May of last year, diverts state deposits from large multinational banks to smaller regional financial institutions on the agreement that they increase their lending to credit-worthy small business.
The treasurer visited Starbase Technologies and, later in the afternoon, Luma's Muffin and Mug in North Adams. Both businesses have benefited through loans from the program — Starbase in expanding and Luma's in opening.
"We're getting $2 1/4 billion in taxpayer money that was overseas back in local banks and they're lending," said Grossman while visiting Luma's. "To me, that says there's demand, that banks want the money and that they're willing to put it to work."
In fact, he said, "we insist that they put the money to work, so you can't take the money and hold onto it or we'll take it back."
Grossman began his tour at the Pittsfield headquarters of Berkshire Bank, the latest recipient of $5 million under the partnership plan.
Like Hoosac Bank, the first lender to join the partnership, Berkshire Bank is now obligated to publicize and market the program in the area. The amount and proportion of its lending prior to, and quarterly following, the deposit of these funds will be assessed.
More than two-thirds of the state's new job growth comes from small businesses, and studies estimate that five to eights jobs will be created or retained in the state for each $10 million deposited in these types of small or mid-size banks. More than $160 million has been diverted to more than 40 banks in Massachusetts since the program began in May.
Grossman sat for a spell at Luma's to chat with Mayor Richard Alcombright and reporters.
Grossman said the trip to Luma's in North Adams was in a sense bringing the idea full circle since he had broached the concept to a room full of bankers at City Hall hosted by Mayor Richard Alcombright, who had worked at Hoosac Bank for 36 years.
Hoosac signed on and the money "flew out the door," he said. "They made loans of over $4 million in first six months and exceeded expectations."
Among the loans was $500,000 to precision manufacturer Starbase Technologies ("He's already told Hoosac he's coming for more money) for new equipment that translated into 17 new jobs and $10,000 for Luma's coffeeshop, which opened this past week.
At Taconic, Grossman toured some areas of the school building along with Mayor Daniel Bianchi, U.S. Rep. Tricia Farley-Bouvier, and Superintendent of Schools Howard "Jake" Eberwein III to review its infrastructure needs. Grossman serves as chairman of the Massachusetts School Building Authority.
"I'm interested to know what the current state of science education is here," Grossman said, citing the connection being discussed between life sciences and economic development in Berkshire County.
"We collectively have a very strong sense of urgency about getting Taconic done," Grossman told local officials, "About being fast, flexible and entrepreneurial, about doing it in a way that conforms with all of MSBA's appropriate regulations. I'm going to wait for the study to come out in April, but presuming that that study comes out and that there's a pathway forward, I think the people of Pittsfield have waited long enough, and they're entitled to see this kind of 21st century education take place."
Editor Tammy Daniels contributed to this report.
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