Conference sows entrepreneurial seeds for growth By Bruce Edwards (PHOTO OF LAWRENCE MILLER)
CASTLETON — Lawrence Miller knows something about entrepreneurship. Before his current job as secretary of the Agency of Commerce and Community Development, Miller started Otter Creek Brewing.
But getting to the point where the Middlebury brewery could be considered a success had its challenges, Miller told the 200 attendees at an all-day business conference at Castleton State College on Monday.
Miller was one of a number of speakers and workshops that focused on practices to help new businesses and budding entrepreneurs.
Rutland business leaders started off the Grow Your Business Over-Easy seminar with a pitch on why the city and the area is an ideal place to do business, including the city’s pro-business attitude, workforce and transportation infrastructure.
They pointed to a series of recent positive developments anchored by Green Mountain Power’s new Energy Innovation Center in the heart of the downtown.
Brennan Duffy, executive director of the Rutland Redevelopment Authority, gave a short PowerPoint presentation ticking off a list of what the city has to offer.
“Strategic location, lower cost real estate, a strong workforce, robust infrastructure, business friendly environment and a great quality of life,” Duffy said.
He said there are financial incentives available including commercial and industrial tax stabilization.
In terms of job growth, Duffy said while the county has lost jobs in the last decade the city has experienced 4 percent job growth. “That’s a positive sign for the city,” he said.
In discussing the Vermont economy, Miller said “income improvement” has not kept pace with the cost of living. “That needs to change,” he said. “We need better wages, we need better income, we need it across the spectrum.”
Miller said the problem is that while companies are more productive, those companies are doing it with fewer workers.
“So what do we need, we need more firms,” he said. “How do we get more firms, we need more entrepreneurs and that’s what a day like this is all about.”
The seminar also featured nuts and bolts topics.
Stuart Meyer, a lawyer with Fenwick & West, explained the importance of protecting intellectual property (patents, trademark, copyright).
Robert Buzzell, a Rutland certified public accountant, gave a primer on using EBITA (earnings before interest, taxes, depreciation and amortization) as one method in assessing the value of a business and comparing it to other businesses.
For the budding entrepreneur, KiKi McShane of Chris Fucci Associates, warned that any new business will experience growing pains and will need to adapt to uncertainties as they come along.
The key, McShane said, is managing change and conflict toward a positive outcome.
“Entrepreneurial means take risks, be future oriented and deal with conflict because conflict is creative,” she said.
Miller gave an example of how he adapted to the enviable problem of Otter Creek Brewing having an abundance of orders.
“It was flying, really flying,” Miller recalled. “Growth was very high, couldn’t make enough product.”
That concerned his distributor, Baker Distributing of Rutland. Miller said Joe Baker paid him a visit to the Middlebury brewery and gave him some valuable advice. Over the years, he said Baker continued to take the time to guide him as he grew the business.
Miller said seeking sound advice is critical to the success of any business, especially when the unexpected happens.
“Those are both professional advisers and board of advisers, your mentors, people you can call,” he said. “You can’t always call your professional advisers at 10’clock at night.”
The afternoon was devoted to specific workshops on agriculture and specialty food products, high tech industries and energy. Moderators included Mary Powell, president and CEO of Green Mountain Power; Cairn Cross, co-founder and managing director of FreshTracks Capital; and Jim Harrison, president of Vermont Grocers Association.
The conference held in Glenbrook Gym, gave Castleton State College President David Wolk the opportunity to talk about the school’s entrepreneurial approach to its operations to remain competitive with other schools.
“Although we’re a public college, we have the lowest percentage of state assistance in the country at 9 percent, next year it will be 8 percent,’ Wolk said. “And that’s not a complaint, that’s not whining, that’s just what it is.”
He said the college has been successful in its ability to expand over the last decade with campus improvements approaching $73 million.
The conference was organized by Chris Fucci Associates.
ST. ALBANS MESSENGER:
DOWNTOWN: Eminent domain in works Written By: Michelle Monroe Cloud addresses City’s situation
ST. ALBANS CITY — St. Albans City Manager Dominic Cloud today spoke out about the city’s possible eminent domain claim against downtown businessman Keith Taruski.
That action could be taken at tonight’s city council meeting as part of the city’s plans to build a parking garage, hotel and new state office building downtown.
Taruski, who spoke to the Messenger for a report published on Saturday, owns part of the core downtown parking lot, which is the planned site of the parking garage.
Cloud was unavailable to comment Friday for the Messenger’s report, but today said the city has been in discussions with Taruski for six years and has made about a half dozen offers for the property.
The most recent offer was $100,000, he said. Parking rights given to the city encumbers the property and its assessed value is only $30,000, according to Cloud.
"We're trying to reorganize the marketplace so the entire downtown can grow," said Cloud. "It's government's job to organize that which everybody holds in common, the public parking."
A previous letter of intent signed by the city and Taruski is now available on the city's Web site (www.stalbansvt.com). In that letter the two agreed that the city would pay Taruski $90,000 for the land, except for a 20-foot strip on the back of the former Napoli building on Federal Street.
The deal also would have given Taruski 20 feet of land along the north side of the Napoli building, currently owned by the city. That land is located next to the entrance into the parking lot from Federal Street.
Once the city began working with consultants on the design of the parking lot and new state office building – which is also slated for Federal Street – it became apparent that the space could not accommodate the new office building, the entrance to the garage and the 20-foot strip for Taruski, explained Cloud.
The city's final proposal replaced the parking on the side of the Napoli building with parking spaces in the garage. Taruski would have retained parking spaces behind the building, according to Cloud.
Cloud described the letter of intent as a preliminary deal, which the city attempted to finalize when it offered Taruski $100,000 and parking in the building. At that point, Taruski's asking price doubled to $200,000, according to Cloud.
Over the weekend, Taruski posted a statement on Front Porch Forum urging those concerned about the city using eminent domain to take land to attend tonight's city council meeting.
"To say this is the little guy being taken advantage of doesn't hold up to scrutiny," said Cloud this morning in reaction to that post.
The city has offered three times the value of the property and parking spaces in the garage. Taruski, Cloud noted, would also own two buildings in the heart of downtown revitalization.
Cloud sent a letter to the editor Monday morning explaining the city's position. It can be read in full on page 4A.
The city council will meet tonight at 6:30 at city hall to discuss the issue. Votes on whether to take the property and a price to be paid to Taruski are also on the agenda.
BURLINGTON FREE PRESS:
Behind the scenes: Shumlin administration frets over National Life Email warned governor not to refute reports of $2 million estimate, but message didn't get there in time TERRI HALLENBECK MONTPELIER — A half-hour before Gov. Peter Shumlin’s news conference was to start last Wednesday, Secretary of Administration Jeb Spaulding received an email from Buildings Commissioner Michael Obuchowski suggesting changes to a memo the governor was going to use for talking points.
The email came too late. The governor didn’t get the word.
Shumlin went ahead and said his staff had no idea where an estimate of $2 million for moving some employees ousted from Waterbury by Tropical Storm Irene to the National Life building in Montpelier came from. The governor ripped into an Associated Press news story that quoted legislators as being surprised that the price for the move had reached $8.65 million.
“We never said that it would cost $2 million,” Shumlin said at the news conference. “I don’t know where that number came from. I don’t deny it might have been said to the committee, but all I can tell you is it wasn’t said by us.”
What Obuchowski wrote in the email, obtained by the Burlington Free Press through a public records request, doesn’t exactly pin down the source of the $2 million estimate, but it does indicate it was real enough for Obuchowski to recommend it be removed from a memo outlining the issue for the governor.
“Recommend striking second sentence in item #1, Paragraph 1: ‘We do not know where such a figure came from, but do not believe it was us,’” Obuchowski wrote. “Rep. Butch Shaw in a conversation with (Principal Assistant) Wanda (Minoli) yesterday indicated he has notes indicating that the total cost of the NL was informally quoted as $2,000,000.”
Other legislators on the committee said they also had $2 million in their notes, and if they had known it would be $8.65 million they might have considered other options.
Spaulding said he received the email too late to alert the governor, but he maintained Monday the administration still doesn’t know where the $2 million estimate originated, and staff have no written record of it in their own files.
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He also said $2 million could never have been a proper estimate, because the state hadn’t yet received a professional estimate.
“It would be jumping the gun to conclude how much it would cost before you have an estimate from professionals,” Spaulding said.
He also offered records that show legislators were told last April the move would cost an estimated $6 million to $10 million. Another report to legislators in July put the cost at $7.5 million in a document that was posted on the Legislature’s Joint Fiscal Committee website. In October, legislators were given information with the $8.65 million figure, with National Life paying $3.5 million of that. The state is scheduled to pay $3.3 million a year in rent with a 2 percent annual increase.
If legislators were surprised that it cost more than $2 million to move the nearly 400 employees into National Life, they had information indicating otherwise nearly a year ago, Spaulding noted.
A $2 million estimate also should have sounded low to them, Spaulding indicated. He argued the $48 per square foot price for state office space in the privately owned National Life building was “an extremely good deal.”
Estimates for renovating flooded-out space at Waterbury were $200 per square foot. A new building to house 400 employees would cost $31 million, or $400 a square foot, Spaulding said.
Email exchanges among administration officials regarding the National Life move show they were feeling a lot of public heat last week involving the suggestion that costs had quadrupled, and they wanted to quash it as quickly as they could.
Spaulding said the story was spiraling on him, with editorial writers weighing in and even a call for an FBI investigation. “It needed to be refuted,” Spaulding said.
One email indicated the move already was not going over well with employees.
Deputy Transportation Secretary Sue Minter, whose agency was part of the office remodeling at National Life, commented on the memo that was prepared for the governor: “I hope this info gets out to the media. We have certainly heard from staff that are less than thrilled with the moves, and these media reports, unfortunately, fuel their negative attitudes.”
UVM hires firm to recruit more international students UVM hires firm to increase international student enrollment for a percentage of each tuition, but specific services aren't disclosed TIM JOHNSON Efforts to ramp up international enrollment at the University of Vermont have entered a new phase with the hiring of a private company to recruit students overseas and help administer a new academic program for them on campus.
The new venture involves several firsts for the both the school and the company. Specifics on what the company will and will not do for the university are unclear, though, as a public copy of the contract has concealed that information.
The company is Study Group, which has headquarters in Australia and partnership arrangements with educational institutions in six countries besides the United States. The program, to be called UVM Global Gateway, is scheduled to debut in January with about 50 students. Gateway will be a “pathway” program, offering a mix of English and other academic courses over two semesters that will enable participants who meet prescribed standards to enroll as regular undergraduates at UVM. They will pay out-of-state tuition, expected to be about $34,650 in the next academic year, 30 percent of which will go to Study Group and 70 percent to UVM.
The upfront cost to UVM, as spelled out in a five-year contract with Study Group signed Jan. 29: Zero. Study Group will receive a commission, in the form of a percentage of tuition, for each recruited student. UVM anticipates that tuition will cover all programmatic and recruiting costs.
UVM will, however, incur a capital cost. The contract specifies that the university provide on-campus facilities for the program, including office space for four Study Group staffers. The location of this Gateway center has not be decided on, said Richard Cate, vice president for finance, but it will be on university premises in space that is currently “underutilized” and that will likely cost about a half-million dollars to remodel.
The new pathway program represents something of a pathbreaking venture for UVM. This is believed to be the first time the university has contracted with a private partner to help run an academic program on campus. UVM officials say they will have full control of the pathway program, which the contract says will be “owned and operated by UVM.” UVM retains final say over admissions, curriculum, and Study-Group-developed marketing materials, and will provide all necessary faculty as well as a director.
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By contrast, Study Group pathway programs at other universities are offered on-campus facilities called International Study Centers, the company’s brand name, and under directors and faculty hired by Study Group. That’s the case at James Madison University, a state institution in Harrisonburg, Va., that’s a bit larger than UVM (undergraduate enrollment last fall was 18,107, compared to UVM’s 10,192). James Madison began working with Study Group in 2010 and now has students enrolled in the International Study Center there.
At UVM, the full title of the program is a sequence of brand names: University of Vermont Global Gateway at International Study Center. UVM’s brand takes precedence, which is not the case with centers run by Study Group at other institutions.
“The fact that we’re branding it UVM Global Gateway clearly differentiates ourselves from models they’re running at other institutions,” said Chris Lucier, vice president for enrollment management.
What services Study Group will provide, however, are not entirely clear. The Free Press obtained a copy of the contract through a public-records request. Section 1.1 reads:
“During the term of this Agreement, Study Group shall provide the services described Schedule A (the “Study Group Services”) in support of recruitment of qualified international students, UVM’s establishment and maintenance of a Pathway Program and UVM’s larger internationalization efforts on campus.”
Schedule A runs eight pages. In the copy of the contract supplied by UVM, the specific services and activities of Study Group are redacted, or blacked out. A letter from UVM stated that these portions contained “confidential commercial or financial information” exempted from disclosure on the Vermont Public Records Act.
The Free Press appealed these redactions to UVM President Tom Sullivan, who upheld them, citing the act’s exemptions for “trade secrets” and “records relating specifically to negotiation of contracts.”
Enrique Corredera, UVM spokesman, said the blacked-out “services” include Study Group’s “detailed work plans” that are proprietary, plans the company does not want its competitors to see.
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The modelPathway programs, pioneered in the United Kingdom and Australia, have been growing in popularity among American universities vying for international students. The programs are aimed at students with acceptable academic records and a command of English that’s not quite up to the standard required for academic work at the American college level. Pathway students are conditionally admitted, then spend a semester or two improving their English and earning college credits before they are formally admitted to enroll as regular students.
UVM’s initial pathway program, now in its fourth year, has been overseen by Northeastern University in collaboration with Kaplan China. Students in China spend two semesters in Kaplan centers there, taking courses in English and other academic fields, then are admitted as sophomores to universities that participate in the consortium, of which UVM is one. UVM now has about 90 undergraduate students from China who progressed through this program, and 25-30 more are expected to arrive this summer in anticipation of fall enrollment, according to Lucier.
The university expects to continue this arrangement, called U.S.-Sino Pathway, even as it establishes its own pathway program on campus with assistance from Study Group.
International students now account for about 1.8 percent of UVM’s undergraduates, a fraction much smaller than at many public universities. The goal is to raise that share to 5 to 7 percent by the fall of 2017. The additional international students would replace domestic out-of-state students, as UVM has pledged to maintain its Vermont enrollment, which stands at about one-third of the undergraduate student body.
Study Group’s contract calls for the delivery of 50 students to start the program in January; 70 students in May; and 70 students in subsequent, twice-a-year cohorts. The contract spells out admissions criteria (scores in the Test of English as a Foreign Language and GPA), both for the pathway program and for subsequent admission to UVM. The projected growth in international enrollment is more gradual than what was envisaged before the arrival of President Tom Sullivan, who took office in July.
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“The president’s number-one goal of this is to enhance the quality of the student experience,” Lucier said, adding that the campus community, when queried about internationalization, has expressed “a definite belief that we needed international students because our campus was really low in the 21st century.”
Study Group, which works with agents in about 35 countries, is also authorized to recruit English-proficient students for direct admission. UVM’s Admissions Office, which will be the gatekeeper for all admissions, will add three officers who also will be working on international recruitment, Lucier said, in such target markets as Southeast Asia, Turkey and Central Asia.
The contract specifies that after UVM receives a completed application for the pathway program, an admissions decision must be made within three business days. The international market requires a quick turn-around, Lucier said, but pointed out that Study Group is accountable for the quality of applicants and that UVM will test their English proficiency when they arrive.
The revenue split, between UVM and Study Group, varies with the type of student. For Study Group recruits who are admitted directly, Study Group gets 25 percent of the student’s first-year tuition; UVM, 75 percent. For students not recruited by Study Group who enter the pathway program, Study Group gets 12 percent of their two-semester tuition; UVM, 88 percent. The contract calls for Study Group to collect all fees and to remit the university’s share to UVM.
For students in the pathway program, Study Group gets 30 percent of tuition for the pathway year; 20 percent of tuition in the first year they are enrolled as UVM students; and 10 percent of their tuition the following year. UVM receives the balance of tuition in each case.
In the two semesters beginning next January, the contract calls for 120 students to enter the pathway program. At the anticipated out-of-state tuition for 2013-14 of $34,650, that would mean $1,247,400 going to Study Group, and $2,910,600 to UVM. Study Group’s share would underwrite marketing and recruitment overseas and pay the four staff members on campus. UVM’s share would pay for faculty and administrative costs. (UVM now has three lecturers who teach English for academic purposes to international students and will be hiring another by January; three or four more could be hired over the next several years, said Gayle Nunley, associate provost.)
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The pathway curriculum, now under development, is likely to include two English courses and two other academic courses (in mathematics or social science, for example) each semester, for a total of about 14 credits.
About Study GroupIn September, UVM issued a Request for Proposal inviting prospective “partners” to discuss how they would recruit international students from different regions, and optionally, how they would provide consultative services for pathways programs.
Three companies responded. Study Group’s was the low bid, Lucier said. Also working in Study Group’s favor was that the company planned to provide staff on campus, which UVM officials saw as “making an investment in the success of the pathway program,” Lucier said. He added that Study Group also appeared to have the best knowledge of the U.S. educational system and the role of pathway programs in that system.
According to its website, Study Group relies on 33 international offices and more than 200 education counselors to recruit students for more than 100 higher education institutions, many of them with International Study Centers. Besides UVM, one of the latest partners is the University of Maine System, which has agreed to establish an International Study Center on two campuses. Of its customized partnerships with universities, Study Group says on its website, “No two relationships are ever the same.”
Study Group is one of a number of private companies that specialize in recruiting international students who are not native English speakers and helping to prepare them academically for enrollment in English-speaking universities. Other such firms are Navitas, which has a contract with the University of New Hampshire, and INTO, which has a program at Oregon State University.
Study Group was established in 1994. In 2006, it was acquired by an Australian private equity company, and in 2010 by an American private equity company — Providence Equity Partners, which calls itself “the world’s leading private equity firm focused on media, communications, education and information investments.”
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The payment arrangement with Study Group was more to UVM’s advantage than possible deals with other companies that required substantial upfront payments, said Cate, UVM’s vice president for finance.
“The bottom line is, We made sure that the university has complete control over who’s accepted in the program, complete control over the academic outcome and the program offerings. And so, is there an incentive for Study Group to find good students who will be successful in the program? Yes.”
“They will either deliver or they will not,” said Corredera, the UVM spokesman. “If they deliver they’ll get paid. If they don’t they will not.” The contract can be terminated with six months’ notice for various specified reasons, including “unsatisfactory recruitment to the pathway program.”
Asked why UVM chose to hire a company rather than boost international enrollment through its own efforts, as some institutions have done, Lucier said:
“We have zero brand presence in most of the international markets. The amount that we would have to spend in admissions office staffing, travel, the amount of time it would take to build those markets, which is at least three to four years to produce even small numbers? It would actually cost more to build the undergraduate enrollment at UVM that way than it would would be to utilize a company that we find to be reputable, with integrity, who in a way is investing with UVM in the success of this program. That’s it.”