R.I. small-business community optimistic for McKee leadership

Updated at 6:05 p.m.

LT. GOV. Daniel J. McKee, who will become governor in the wake of Gov. Gina M. Raimondo's appointment as U.S. Commerce secretary, has been a vocal advocate for small businesses. / PBN FILE PHOTO/MIKE SALERNO

PROVIDENCE – While the national spotlight now shines on Gov. Gina M. Raimondo in her nomination as U.S. Commerce secretary, it’s Lt. Gov. Daniel J. McKee’s subsequent rise to governor that has the Rhode Island small-business community most excited.

Throughout his campaign and six years in office, McKee has championed the needs and voices of small businesses, drawing upon his own experience in a family of small-business owners, as well as actively seeking small-business feedback through a series of statewide listening tours, events, and as chair of the Small Business Advocacy Council.

“Everything he has tried to do has been fantastic,” said Michael Strout, owner of GottaQ Smokehouse BBQ in Cumberland. Strout knew McKee from his early days in elected office, first as a council member and then the six-term Cumberland mayor. Then, and now, McKee has “taken care of” the small-business community, Strout said.

That McKee had his own small business – he helped run his longtime family business McKee Bros. Energy Solutions prior to his foray into politics – makes him uniquely positioned to understand the needs of fellow small-business owners, said Donald Nokes, president and co-founder of Cranston-based information technology service company NetCenergy. Nokes also serves on the state’s Small Business Advocacy Council.

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“Anytime any official is elected that has the background and the empathy for business, it’s really helpful,” Nokes said. “I believe he has a perspective that very few leaders in this state have.”

McKee in a statement Friday also highlighted his family business history.

“As a lifelong Rhode Islander whose family has owned and operated small businesses in Rhode Island for over 100 years, I love our state and I’m honored by the opportunity to serve the public as governor during this critical moment,” he stated.

While Raimondo has been touted for driving economic development, much of her focus prior to the pandemic had been on luring major corporations and large businesses through a beefed up R.I. Commerce Corp. 

Yet as Nokes noted, the Fortune 100 companies and major employers who have benefited most from R.I. Commerce tax credits and incentive programs are relatively few compared to the state landscape of small and midsize businesses.

McKee and Raimondo’s differing business priorities have set them apart from the get-go. But the dichotomy between their approaches has been particularly apparent since the onset of COVID-19, with McKee vocally criticizing the state’s rollout of small-business grant programs and offering specific recommendations for how to better get federal Coronavirus, Aid, Relief, and Economic Security Act funds into the hands of struggling small businesses.

It was through his advocacy in partnership with the Rhode Island Small Business Coalition that Jennifer Ortiz, owner of Executive Cuts in Providence, got to know McKee, she said. The longtime hair salon owner found McKee and the coalition a much-needed and available resource as she tried to navigate the various federal and state relief programs for small businesses.

“He’s the only one who has taken the time to listen to us and let us explain what we’re going through,” Ortiz said.

Asked if she felt Raimondo had listened in the same way, Ortiz said “not at all.”

“She took too long to roll out the money,” she said of state programs for businesses funded through federal CARES Act dollars. “A lot of businesses closed that could have been saved if things had been rolled out in a more timely fashion.”

Whether McKee would have been able to mobilize state grant programs faster, she was unsure. No one elected official, even the top leadership position, can act alone – a combination of legislative and administrative action is always needed, and also subject to federal requirements in the case of CARES Act funding, as Nokes pointed out. 

David Dadekian, founder of EatDrinkRI LLC, a Coventry-based marketing, media and event company promoting Rhode Island’s culinary scene, didn’t blame Raimondo for what he found to be an overly complex and, at times, not very transparent grant distribution process.

Whether McKee could improve upon that process as governor, he was unsure, but hopeful.

Strout, meanwhile, did not hesitate to call out Raimondo for “turning her back” on the small-business community through a botched rollout of pandemic grant programs.

“McKee would have been 10 times better,” he said, adding that it was directly because of McKee’s advocacy that programs were amended to better help business applicants.

McKee in his statement pledged his commitment to a “smooth transition” and that “our state’s COVID-19 response will not be impacted.”

When contacted by a PBN reporter to ask about McKee’s plans for the small-business community specifically, a McKee transition team spokesman said the team is declining to comment or share additional information, pending a press conference next week.

Where McKee stands on raising the minimum wage, an issue slated to take center stage this legislative session amid a more progressive General Assembly, is unclear. In a statement Friday, Rhode Island Working Families Party State Director Georgia Hollister Isman called on McKee to “represent the will of Rhode Islanders” in the “mandate for a $15 minimum wage.” In the statement, Isman noted that McKee has not taken a strong position on this issue.

But for some small-business owners, the prospect of a dramatic wage hike, especially amid a drawn-out economic recovery from the pandemic, could be devastating.

Strout, who has 28 employees, about half of whom make under $15 hourly now, said he would not be able to make payroll if a $15 threshold became law. While he did not know where McKee stood on the issue, he was confident McKee would weigh both sides of the issue and make the best decision for all involved.

Laurie White, executive director for the Greater Providence Chamber of Commerce, which has lobbied for a “predictable” minimum wage rate based on standardized metrics and data points, also said she believed McKee understood the potential negative reverberations the policy could cause for employers and the state economy.

Also in question is what will happen to R.I. Commerce and the large companies targeted under Raimondo’s administration. 

Colin Kane, principal of real estate company Peregrine Group, and former I-195 Redevelopment District Commission chairman, lauded Raimondo for creating a “very, very capable” commerce arm that has allowed the state to compete in a national and international marketplace. While he acknowledged that the resources devoted to this effort, particularly amid the ongoing financial devastation brought on by a still-surging COVID-19 virus, may have to be cut back in the future, he advised against any abrupt changes or dismantling of R.I. Commerce programs.

“A lot of these projects and company relocations take years to happen,” he said. “An abrupt shift would imperil many, many good things for the state.”

Still, Kane was optimistic that “Danny,” who he knew from development projects in Cumberland during McKee’s time as town mayor, was savvy enough not to make abrupt shifts in programs or policies.

(This story has been updated to include comment from a McKee transition team spokesman.)

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.

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