It’s been called “The Hub of the Universe.” With the opening of the glitzy Encore casino and more companies marching north, Boston attracts ever more people and money, like some super-massive celestial body. As the city expands into a “conglomerate” metro, will struggling Connecticut benefit from or fall victim to its gravitational pull?
Pulling up to the new Encore Boston Harbor casino, deep in the urban landscape, it’s hard not to think about the energy of the Las Vegas Strip. And with Connecticut native George Cometa as my Lyft driver, the picture of booming metro Boston becomes clearer.
As one casino patron, a young, professional woman, puts it, “Boston is a conglomerate at this point.” She says that as she takes pictures of herself and her friends in front of the colorful, shiny metallic sculpture of Popeye by Jeff Koons — which casino developer Steve Wynn bought in 2014 for $28 million.
By “conglomerate,” she means that Boston’s industry tentacles extend way beyond universities, research hospitals, tech firms, sports and finance. And she means Boston as a place sucks in money, people and attention, like the great corporate conglomerates of the 20th century such as General Electric.
That’s a scary reality for Connecticut, which keeps losing people like Cometa to New England’s dominant metro. The 2006 UConn chemistry graduate grew up in Milford, where his family still lives. He worked for Pfizer for a while but says, “Pfizer was downsizing at the time, so I had to leave.”
He gravitated to Boston, where bioscience jobs are plentiful; lived near Fenway Park; and now holds a job as a project manager at Waters Corp., a medical device maker. The Lyft gig, in a low-slung BMW, pays for vacations and extras. “It’s a college town, which allows people to be innovative,” he says.
Cometa, who now lives in Waltham — home of Raytheon, which is slated to merge with United Technologies Corp. and keep the corporate headquarters and name — has nothing but good things to say about Connecticut. “Who wouldn’t want to live in Connecticut, between two major metropolitan cities? It’s got absolutely everything.”
Everything, that is, except Cometa, a bunch of his friends and my own 24-year-old daughter and a bunch of her friends. “Most of my friends that do stay in Connecticut are teachers and nurses,” Cometa says.
The new casino is just a small slice of that Boston conglomerate feel, but it’s a sensitive one for Connecticut, as that’s been a strong source of wealth since Lowell P. Weicker Jr. was governor 25 years ago. The migration of the UTC and GE headquarters, along with others including drugmaker Alexion, forms yet another sensitive part of the whole for Connecticut.
Likewise, Massachusetts, with Boston as its capital, moves forward in legalized, adult-retail marijuana, commercial casino expansion and sports betting — not that those are great beacons of civilization — while Connecticut fails in those areas, as well as in needed tax, health care and economic reforms.
It’s all part of a big picture of rising dominance by the city that calls itself, correctly, the Hub.
Headaches and youth
The specter of youth culture comes to life at Encore Boston Harbor, where, on my visit on a Sunday night, the crowd is much younger, more bejeweled and decked out and more likely black or Latino than the customers we typically see at Foxwoods and Mohegan Sun.
That’s the cultural and economic force of Boston speaking, not necessarily Wynn Resorts, which built the new casino amid recriminations over its founder’s sexual misconduct and Wynn management’s slowness to, well, manage it. In some ways, Encore doesn’t fit in — a $2.6 billion gambling palace along the reaches of the harbor, rising from an industrial landscape in the inlying, working-class, immigrant town of Everett.
It’s an urban oasis of glitz, in metro Boston but not of it, a separate reality, like the dreamland resorts of the Vegas Strip. Instead of the Sands or Caesar’s across the street, we see a hulking power plant and Everett city parking lots designed to cash in on the gravy train.
And instead of desert on the horizon, downtown Boston looms. But the social energy of the strip vibrates with the golden hotel tower shining at night and reflecting the sun by day, with crowds pouring across the broad boulevard and with cars snaking through giant, white, brightly lit entry gates.
That’s a different vibe than MGM Springfield, which aims to blend into its city, or the Native American casinos of Connecticut, which offer a convenient, if distant, pair of destinations with inward-facing energy.
Where Encore does fit in, where it reflects Boston life precisely, is in its massive inconvenience. Like everything else in the eastern Massachusetts metro, it’s so physically close, you can see it and hear it. But good luck getting there. Brenda Peters, a millennial consultant, says it took an hour to get to Encore from her home in nearby Somerville, a trip that would have taken nine minutes without traffic.
She could have stashed the high heels in a bag, donned sneakers and walked to the casino in less time. “I’d rather go to Foxwoods, to be honest,” Peters says.
In a tricked-out Nissan at the main entrance of Encore, rideshare driver Kenneth Thompson, a 10-year Boston resident formerly from Hartford, calls out, “Foxwoods is the king!” when I ask his impression of Encore.
Still, for Boston as a whole as well as the new casino, the headaches — Encore has too little parking and is not even along a transit T route — seem worth it to the masses, based on where people choose to live, the only vote that matters.
Part of two giant metroplexes
The effect is a regional economy that’s growing strongly even as the nation starts a slowdown. “If you look at the Seaport, it’s constant building,” Cometa says, referring to the neighborhood just south of downtown, with some 2 million square feet of office and hotel space. It’s home to companies such as GE, which loudly exited Fairfield in 2016 — although that struggling conglomerate canceled plans for a highly advanced, new headquarters building in the heart of the Seaport district.
And we have another regional economy — ours, in Connecticut — still struggling to see job growth, gains in house prices and overall development exactly 10 years after the last recession ended. Now that we’re in record territory for U.S. economic expansions, looking ahead nervously at the next recession, we wonder: Is metro Boston’s success more good, or more bad, for Connecticut?
There’s no easy answer. It does draw activity to the whole region even as it vacuums up resources from within the region.
And the more important question: Given that urban size and density matters when it comes to success in the 21st century, is there much that Connecticut could have done, or could now do, to compete with the likes of Boston?
Clearly, as UConn economist Fred V. Carstensen asserts, we are part of the New York and Boston metroplex supersystems. “We are inherently dependent, given the enormous power of the big metros. Our challenge is to try to figure out how we can benefit as much as we can off of the dynamism in those areas,” Carstensen says. “We need to create as many connections as we can to these metro areas and we need to provide them with services.”
If that sounds like a permanent second-class status, that’s not how Carstensen means it. What he means, and what David Lehman, Gov. Ned Lamont’s economic development chief, means when he says we can double New Haven’s population in the next generation, is that Connecticut has to act more strategically when it comes to growth.
Carstensen’s biggest criticism: “The lack of any coherent vision about where we are, how we got here and where we want to go … We seem to do everything piecemeal and we don’t connect the dots.”
That’s partly because of Connecticut’s famously balkanized, town-based political structure and partly, Carstensen says, because we have no setup for studying the effects of public decisions. He adds, “we have no coherent data policy” to create a backbone infrastructure for supercomputing of the sort giant companies and universities need. By contrast, Harvard, MIT, UMass Amherst and Northeastern University created a massive data center in Boston.
Would changing those and other shortcomings make up for the simple fact that millennials prefer to live in large, walkable cities rather than suburbs and exurbs with fewer headaches? For mass culture, no. On the margins, for some people, yes. And that adds up. Connecticut still has a lifestyle advantage it can exploit.
Pick a winning strategy
OK, so we agree we need a better growth strategy. Trouble is, one person’s growth strategy is another person’s route to stagnation. As we saw in 2018, when the Connecticut Commission on Fiscal Sustainability and Economic Growth created pages and pages of recommendations that led mostly to more infighting, there’s no agreement on what makes sense.
The two major lines of thinking, aligning with the two political parties, are: Route A, invest heavily in cities and the links between them, especially mass transit; and Route B, cut the cost of doing business. We have an overhang of unfunded pension and health liabilities ranging from $50 billion to $100 billion, depending on how we count it, because we didn’t set aside money for decades. That makes tax cuts impossible and starves new spending.
Massachusetts, as an old-line state with high legacy costs, had a similar problem, but as the old economic saying goes, growth hides all sins. So they have a virtuous cycle and Connecticut fights a vicious cycle.
Connecticut’s two parties are pretty good about investing in people, although the Republicans universally opposed both raising the minimum wage to $15 an hour by 2023 and adopting a paid family and medical leave program, which will allow up to 12 weeks of paid time off — but will cost most people working in Connecticut a few hundred dollars a year.
Both measures passed this year in Connecticut along with a moderate sales tax expansion. But do they go too far? Republicans say those changes will starve growth further by scaring away business. Rep. Ann Hughes, D-Easton, a leader of the Democrats’ liberal wing, is optimistic. “We’re going to catch up,” she says. “If we can get the public option, that will be a game-changer.”
The public option is a health plan run by the state, opposed by Republicans and the insurance industry, which Democrats say would reduce the cost of health insurance. Massachusetts doesn’t have a public option but pioneered the reform that became Obamacare nationally.
As for social services, economist Jeff Fuhrer, executive vice president of the Federal Reserve Bank of Boston (yes, Connecticut falls under that), says, “There’s never such a thing as too much wise investment in people.”
Speaking at a June forum that I moderated at the Connecticut Health and Educational Facilities Authority in Hartford, Fuhrer says that when it comes to job growth, “it’s really important to understand what it takes to go to work and to be able to work for the average person in the economy, and more importantly for the low-income people in the economy.”
He was adamant, though, on investing effectively. “If you just spend money, put Band-Aids on things because we’ve done that for years, that’s sad, that’s a tragedy.”
Sorting out good from bad investments is not so easy, and anyway, there’s no clear way to pay for it in Connecticut, where the lack of a major magnet city leaves growth unassured.
Then there is economic development policy, which, under governors in three parties over the last three decades, has meant spending money on redevelopment and throwing money at companies to come, or to stay. Massachusetts certainly does all that.
Lamont and Lehman are moving in a different direction, favoring tax breaks, though the details remain undisclosed.
Carstensen’s push to deploy earned but unusable tax credits led to the 2014 deal between then-Gov. Dannel P. Malloy and United Technologies, under which the company was allowed to unlock $400 million in tax credits, in exchange for building enough new research, manufacturing and lab space here to assure its thousands of jobs stay put.
The idea, whatever the strategy, is to have a place that works as a whole. What that means in a state with a string of smaller cities, rather than a hub metro, is unclear. But encouraging cities to work together, and bringing research at Yale and UConn together, for example, would work well at a time when spread-out means left-out.
A unified place
Anyone who believes Massachusetts’ success has been the haphazard result of urban magnetism is just dead wrong. Mayors and governors, more often than not from different parties, crafted over the years a technology and development strategy that works.
“They’ve really tried to bring businesses to the area and keep them here and slow the brain drain,” says Cassidy Norton, associate publisher and media relations chief for The Warren Group, a Boston-based real estate information business.
Brain drain? In Boston? We thought that’s where neurons went to reproduce. In fact, Norton says, it’s something the region worries about despite its success.
The strategy is not brain surgery, speaking of neurons. “Mostly being supportive,” Norton says. “Incentives and tax breaks and finding places for startup incubators to live, supporting the Seaport district.”
And before that, there was Kendall Square, the MIT-linked corporate neighborhood in Cambridge that became the world’s center for pharmaceutical development.
“When you have these things working all together, you have this new epicenter of development in Boston,” Norton says. She adds, “It’s partially coincidence that they created the kind of housing that people wanted to live in.”
A quick look at the numbers is sobering. Connecticut outpaced Massachusetts in overall growth and job creation before the 2008-09 recession. Connecticut then suffered far bigger job losses in the downturn, as a percentage of the total. And since the recession ended, Connecticut has seen its economy stagnate.
A gain of 1 percent in jobs is considered a benchmark of good economic growth in the Northeast. Since the recession, Connecticut has had just one such year, 2011. Massachusetts has had seven 1-percent-plus years, including three in a row, 2014-16, with more than 1.9 percent, or about 60,000 net new positions per year.
In house sales, according to data from The Warren Group, Connecticut saw the number of sales rise by 3 percent in 2018. But prices have remained mostly flat, with declines in some price ranges and areas — notably Fairfield County.
Massachusetts has seen sales numbers jump by close to 5 percent in the last six years, and consistently steep price hikes for houses. Essex County, north of Boston, for example, recorded a median sale price increase of 26 percent between 2013 and 2018, Warren data shows.
And all of that is in addition to a robust condo market, which Connecticut lacks, and with western and southern Massachusetts not performing nearly as well as metro Boston.
Back to Connecticut?
The effects of all this are evident on a drive from the Allston neighborhood in Boston, through Cambridge, then Somerville, then over the bridge to the Everett casino. Streets that I remember being rundown years ago are now fixed up, though Cambridge has some low-income neighborhoods. Kendall Square is overwhelming, if sterile, as an office haven.
The 6-foot-6-inch Popeye the Sailor Man sculpture, on a pedestal in the casino hotel, is just one popular photo attraction, along with a full-size carousel of piñata-like horses in the main lobby. Wynn owns one of just three versions of the famous Koons sculpture. Another, ironically, is owned by Greenwich hedge fund billionaire Steve Cohen, according to CNBC. Cohen paid $91 million this year for another Koons sculpture, according to a Bloomberg report citing Artnet.
But those are in Cohen’s renowned private collection, not out in the open where we can take selfies with them. The point: Connecticut still has the assets, though not as part of public vibrancy.
“Things will swing back eventually,” says Norton, at The Warren Group. “We keep pushing further out into the suburbs … and the infrastructure is really having a hard time handling it.”
Cometa, the Lyft driver and medical device project manager, can imagine returning to his original home state. “If you want to live in Connecticut, grow in Connecticut, thrive in Connecticut, you’ve got to work, you have to really hustle, you have to adapt,” he says.
True, but housing is cheaper, congestion is less and traffic backups shorter. Whether that leads to a growth spurt is an open question as Connecticut works, hustles and adapts.