1. Quonset Point/Davisville
With the announcement last month that international shippers SeaLand
and Maersk were taking Quonset Point off their list of sites to develop
a major shipping port, the future of the former Navy base became at
least slightly more clouded.
Backers of a plan to create a major international shipping port at
Quonset Point – including Gov. Lincoln Almond — insist that SeaLand
and Maersk represent two of many international shippers who could
potentially develop a major port at Quonset Point. The stakeholder
process, which includes representatives from business and environmental
groups, as well as the political arena, is moving forward.
But the stakeholder process has also endured its share of criticism as
observers wonder if the process has become bogged down and as a result,
lost an edge in the increasingly competitive international shipping
arena.
The establishment of an environmentally responsible shipping port at
Quonset Point could be the biggest economic generator in the state’s
history. In and of itself it would create thousands of jobs and spur
other economic development projects.
Whether this port is ever built – and to what level – will likely be
determined early on in 1999 and with it the future of the old Navy base.
2. Health Care
Outgoing Attorney General Jeffrey B. Pine stunned the industry in
September when he put the kibosh on the proposed merger of Care New
England – a network of Kent County Memorial, Women & Infants and Butler
Hospitals – with CareGroup of Boston. However, the issue of melding
healthcare networks to save money is far from dead. Care New England and
Lifespan – whose flagship facility is Rhode Island Hospital – have
proposed an in-state merger that would create an eight-hospital network
with more than 63 percent market share.
The controversial request will be a top priority for Pine’s replacement,
Sheldon Whitehouse and for the Department of Health. And it remains a
major concern for health industry labor unions that fear that such
mergers will only mean a reduction in their forces.
Meanwhile, health care insurance was taking center stage as the year was
coming to a close, with health insurers projecting rate increases from 8
to 20 percent. Blue Cross was exploring how to cut its losses,
potentially merging with other Blue Cross-Blue Shield operations in
other states, and Tufts, a newcomer to the market, announced it was
eliminating one of its products in Rhode Island.
At Roger Williams Hospital, the hospital was embroiled much of the year
in a controversy over expenses involving Robert A. Urciuoli, its
president and chief executive officer. This followed the hospital’s
failed effort to merge with Columbia/HCA, the for-profit hospital group.
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3. Year 2000
The sky is falling, and if you don’t move quickly it promises to come
crashing down on your computer system.
That was the message delivered by experts this fall during a conference
on the impending Year 2000 computer problem held at Bryant College. Some
larger companies throughout the country are investing tens of millions
of dollars to ensure that they are Year 2000 compliant. But others –
particularly smaller businesses – are apparently prepared to gamble.
According to a study by the National Federation of Independent
Businesses only 20 percent of small businesses are actually in the
process of modifying their computer systems to be Year 2000 compliant,
another 20 percent plan on doing something, 40 percent don’t believe
they need to make any modifications, and another 20 percent don’t know
anything about the issue.
Area banks, in particular, were at the forefront of correcting the
problems, primarily because of regulatory requirements.
4. Plant closings
Rhode Island’s manufacturing base, which for years has been on the
decline, continued in that direction in 1998. While there are
manufacturers aggressively marketing products overseas and enjoying
success as a result, such examples too often are more the exception than
the rule.
The rule has been more sad stories. In 1998 Quebecor Printing announced
it was closing its two Rhode Island plants, resulting in the loss of
jobs for some 300 employees. Allied Signal, which once boasted of 1,200
employees in Rhode Island, gave the 60 remaining FRAM employees in East
Providence until the end of this week to decide between relocating out
of state or accepting a severance package. Only the company’s Bendix
marketing group will remain in Rhode Island.
Toy giant Hasbro also unveiled dismal news in 1998 – closing its Play
Doh plant in Central Falls, the last of its manufacturing facilities
here.
And on the retail end, one of Rhode Island’s long-time furniture stores,
Harold’s, went into bankruptcy.
5. New jobs
While manufacturing was taking its hits in 1998, high tech and financial
services industries appear to be doing their best to add to the state’s
job base. Fidelity Investments has settled in nicely to new facilities
in Smithfield, CBSI acquired c.w. Costello and further expanded its
presence in Rhode Island, Fleet opened a facility in Lincoln and then
brought its on-line brokerage, Suretrade, to the building as well. In
addition, Boston Financial Data Services is expected to bring hundreds
of jobs to the Foundry in Providence.
And in what is sure to be one of the biggest stories of 1999,
Providence Place, the $450 million mega-mall is expected to open on Aug.
20 of this year. The mall – which will include a 16-screen Hoyt’s Cinema
complex and eight full-service restaurants besides a Nordstom, Filene’s
and Lord & Taylor, is expected to employ 2,500 workers.
6. Taxes
Taxes will continue to be at the forefront in 1999, and were in 1998,
when the state legislature approved programs to phase out both the
automobile sales tax and the inventory tax, considered among the most
onerous for Rhode Island businesses.
Dealing with the auto and inventory taxes was the legislature’s way of
addressing the continuing property tax issue. The Rhode Island Public
Expenditure Council, among other groups, felt it important to eliminate
a tax, such as the auto tax, rather than simply provide property tax
relief.
The challenge, however, will be to make sure that the phase outs of the
car and inventory taxes can be accomplished over a period of years, a
concern shared by legislators and economists.
The drama surrounding the city will only heighten this summer, as preparations for the opening of Providence Place culminate.
7. The renaissance of Providence
The ongoing and dramatic renaissance of the capital city continues to
turn heads and draw praise from throughout the country. Now joining the
acclaimed Waterplace Park are even more hotels – ground has been broken
for a Marriott Courtyard, just a short walk from The Westin – and an
outdoor skating rink that is luring thousands of visitors to the city.
Waterfire became more popular than ever and to top it off, an NBC drama,
making its debut later this month, is called Providence.
The drama surrounding the city will only heighten this summer, as
preparations for the opening of Providence Place culminate.
Meanwhile, several other hotel proposals were being discussed, including
a luxury hotel plan, also by Marriott, for the Masonic Temple.
8. Leonard/Monahan closes
In January, when Leonard/Monahan lost a key account in the Polaroid
Corp., it was the beginning of the end for the award-winning and long-
time Providence advertising agency.
The Dorrance Street shop closed Feb. 27, leaving nearly 300 creditors
who can expect to receive about a quarter of the more than $2 million
owed them, according to documents filed with the U.S. Bankruptcy Court
for the District of Rhode Island.
Leonard went on to work as a full-time consultant for Providence’s
Lukens Boostrom Clark Design, which snagged some Leonard/Monahan
staffers and accounts along the way. The arrangement lasted a little
more than six months, at which time LBC reverted from communications
company to its original design firm status.
9. Venture Capital
Rhode Island officials in the spring of 1998 put the finishing touches
on an agreement to create a $15 million venture capital fund for Rhode
Island based companies. The fund is being managed by Zero Stage Capital
of Cambridge, Mass., and administered locally by the Business
Development Company of Rhode Island.
Rhode Island private businesses were expected to contribute $5 million
to the fund, which would then be leveraged to borrow up to three times
what was raised – making as much as $15 million available in venture
capital.
For years, business leaders have felt it was important to develop a
venture capital fund for Rhode Island companies only. According to
reports in the Boston Globe, Rhode Island companies often do not fare
well in the competition for other venture capital dollars. This new
fund is an outgrowth of a proposal made some years ago for the creation
of a venture capital fund within the state pension system investments,
one that was rejected out of hand by state officials
.
10. Tourism
In May of 1998, the state celebrated the fact that its tourism industry
topped the $2 billion mark for its previous year, an increase in
revenues in one year of more than $290 million. Statistics from the
Travel Industry Association of Rhode Island showed that Rhode Island
grew 45 percent ahead of the national average. According to the state,
the tourism industry generated $429 million in wages, supplying nearly
30,000 jobs.
Contributing to tourism and to the state’s overall visibility was the
continuing development of the state’s film industry, and soon a
television sitcom, titled Providence.
Other stories worthy of mention in 1998 include passage of charter
school legislation and the welcome emergence of National Public Radio to
the local radio scene. The November elections represented a big win for
Republican Gov. Lincoln Almond, but it was the Democrats who swept to
victory in the four remaining statewide races. The New England Patriots
toyed with the idea of relocating to Providence, but instead Bob Kraft,
the team’s owner, accepted a lucrative offer from Hartford, Conn.
Hartford officials have promised to build the team a stadium in time for
the 2002 National Football League season.
Although the rewards of electric deregulation won’t be noticed by
residential and small business customers for a few more years, there
were many indicators in 1998 that lower electricity prices are on the
way. Among the signs: the $1.6 billion sale of New England Electric
System’s power plants, the gradual sale of Eastern Utilities Associates
plants, and the announced merger of NEES’s wires system.
