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  • Business Profile 1 Economic Outlook 1 Executive Profile 3 BankRI Notes 3 Spotlight on the Arts 4 B RI USINESS www.bankri.com Volume 2, Issue 1 A publication from BankRI May 2003 Kenyon Corn Meal Rhode Island’s oldest company by Frank Prosnitz Company: Kenyon Corn Meal Company, Inc. Founded: 1690 There aren’t very many Owners: Paul Drumm Jr. and Paul Drumm III companies that can resist Business: Manufacture corn meal and technological advances even other grain products for a few years and survive. Number of employees: Seasonal But how about three centuries? Location: Usquepaugh, Rhode Island In the case of the Kenyon Web site: www.kenyonsgristmill.com Corn Meal Company in the quiet South County village of Business Profile Usquepaugh, it has been that very resistance ECONOMIC OUTLOOK to change for more than 300 years that has made the company and its products a Rhode Island tradition. “For us around here it’s about trying to maintain the historical aspect, because An odd recovery has us it’s the art of stone ground milling that’s teetering on the edge of really our lifeblood,” says Paul Drumm III a double dip recession who, along with his father, Paul Drumm Jr., and four full-time employees and by Leonard Lardaro, Ph.D several part-timers, operates the mill. Johnnycakes, clam cakes, and a host What a strange time for the economy. It appears that all the “old rules“ have taken a vaca- of other products under the Kenyon tion. Things that we hear about in the media and observe firsthand seem in total contradiction. name have made the mill not only a We hear how the national economy has just about stalled, losing hundreds of thousands Rhode Island tradition, but one that has of jobs over the past few months. How industrial production continues to decline. That caught the attention of national magazines, consumer confidence has fallen to levels it has not reached in almost a decade, and that and even the likes of Julia Child. businesses are still not hiring or spending money on investments. The manufacturing process has changed Yet, just about anyone who goes to a restaurant or mall on the weekend has a hard little since this company was founded, “ It was sort time finding a parking spot, getting seated, or locating someone in a store to wait on them. perhaps as far back as 1690. The lifeblood of passed And despite the national weakness, the performance of Rhode Island’s housing sector of this company, however, is still in its down, a gift continues to be amazing – housing prices here remain very high by historical standards, relationship with customers, often through from one gen- while home sales remain brisk. fairs and festivals where Kenyon’s famed eration to How can all of these things all be occurring simultaneously? Why isn’t this recovery as Johnnycakes are a favorite. another.” rapid and robust as recoveries typically are? “Over the years this mill has had the Welcome to the new millennium! A time when the Rhode Island economy teeters on Johnnycakes that hung on – a local Rhode the edge of a second dip recession, one it is likely to skirt. Actually, the seeds for this go Island thing,“ Paul III says. “It was sort back to late 1987 in Rhode Island. Like the nation, Rhode Island is no longer a manufacturing- of passed down, a gift from one genera- based economy. Back then, Rhode Island had a dominant economic niche. Economic life tion to another. The people that owned was more predictable. A “job“ meant full time employment with fringe benefits. Job loss it at the time were willing to put in that was largely cyclical. extra effort for the love of the place. Then, in late 1987, Rhode Island became a service-and-information based economy. “That’s really what it comes down All the rules seemed to change. Firms, to remain profitable, are forced to continually find to,“ Paul III says. “It’s not that this is a ways to cut costs. This means layoffs throughout all economic conditions, recessions and giant lucrative business.“ He says the recoveries alike. company grosses about $500,000 a year. continued on page 2 continued on page 2
  • A Rhode Island mill for the next 66 years. are safe, with its owner- ship and continuation tradition continues He passed away in the 1980s. assured for years to come. As the Kenyon product Kenyon – continued from page 1 “The mill is a place that gained more regional and is very important to me national recognition, people History is important to Paul III and to carry on,“ Paul III slowly realized that the old his father. The mill, they said, has been says. “It is important method of grinding corn at its current site since 1886, but docu- for the state too – a into meal was perhaps a “The mill is a mentation says it was located elsewhere Rhode Island icon. A better formula than the place that is in this small village as far back as 1711. lot of it has to do with newly mechanized processes. Now the Drumms say they’ve found a what Kenyon means And now, Paul III says the very impor- land transfer that first mentions a grist- to Rhode Island.“ And company is producing tant to me mill in the village dating back to the 1690s. what Kenyon means to many Rhode 60 to 100 tons of corn meal and other to carry on.” Kenyon Corn Meal Company is one Islanders is translated into Johnnycakes milled grains a year. of about 500 to 1,000 mills still operating and clam cakes and chowder, a few Kenyon Corn Meal Company and its in the country, Paul III says, and one of a very tasteful traditions. place on Rhode Island’s historical map handful in Rhode Island and nearby Connecticut and Massachusetts. Many are operated as hobbies, with very few n established as commercial enterprises, and even fewer with the regional and A Jobless Recovery national reputation of Kenyon. Economic Outlook – continued from page 1 Kenyon Corn Meal Company is in the same wooden building it’s been in since Unlike the “good old days,“ layoffs often mean the permanent elimination of posi- 1886. The previous building, just across tions. When new jobs are created, they are frequently part-time. Throughout the 1990s the spillway, was washed away in the Rhode Island attempted, but was ultimately unsuccessful, in building a “critical mass“ in floods of 1886. A tour takes but a few high technology, an area that might have become Rhode Island’s dominant economic niche minutes, walking past and around the in this “new“ economy. But there were a number of notable successes, especially in the large grinding stones, some of which Paul financial services industry, and, more recently, in biotechnology and pharmaceuticals, the Jr. believes to be older than the building, area that Governor Donald Carcieri has targeted to become our dominant economic niche. used elsewhere and then moved to the In 2001, as the national economy slipped into a recession, so too did Rhode Island. It has new facility when it was built. become apparent that economic trends in Rhode Island parallel those of the nation. Set along the picturesque Queens Ironically, though, our lack of a substantial high tech presence spared us from expe- River, the mill has historically been the riencing as severe a recession as did the nation overall or “successful“ high-tech states. gathering place for local residents who For Rhode Island this recovery has not been as vigorous as it would have been after would bring their corn to be ground, or a more traditional recession. Since the recession wasn’t very deep and several key areas came to buy products. It was where local were spared the usual damage (notably housing, retail sales, and unemployment), news was exchanged and was, and still is, there is simply not as much for us to recover from. And, the job loss that continues to the largest employer of the small village. occur, which offsets the gains from being in a recession, makes recent changes in payroll The Drumms are the 12th recorded employment very small. Rhode Island added 500 jobs last year. While this 0.1 percent owners of the mill. rise would usually be viewed as unsatisfactory, we were among a very short list of states When Paul Drumm, Jr. bought the to actually add jobs in 2002. mill in 1971 he was actually looking for While we hear that this is a “jobless“ recovery, this designation is far more serious an empty building where he and his wife at the national level than it is for Rhode Island. Furthermore, our unemployment rate could make and sell crafts. A computer in the early stages of this recovery is nowhere near as high as it was at the beginning repairman for IBM and MAI for several of the last recovery in 1992. years, Paul Jr. had hurt his back and As of the last quarter of 2002, however, Rhode Island’s relatively slow recovery began decided to change professions. A Realtor to sputter, moving us perilously close to the second dip of a “double-dip“ recession. suggested the mill – a business Paul Jr. My Current Conditions Index (CCI), a broadly based indicator of the Rhode Island knew nothing about, so he mortgaged economy, has registered ongoing deterioration since last October, with the 2003 values his home and bought the mill. indicating contraction. This is the usual “signature“ of the onset of recession. “He (the Realtor) said this is a going Retail sales growth in Rhode Island has slowed “ I believe we will remain business,“ Paul Jr. says. “The problem is dramatically, now around a 1 percent annually. Just a close to sliding into recession he didn’t tell me which way it was going.“ few months ago, this indicator was growing at well for several more months.” “There was no volume,“ says Paul over 5 percent. Our labor force is rising, and at an III. “It was a very slow pace. Johnnycake unbelievable 3.7 percent annual rate. The number of Paul Drumm, Jr., meal was 29 cents a box.“ working Rhode Islanders in February grew by almost seven times the net number with his son, Paul For the first five years, Paul Jr. just of jobs added in our state. Try explaining that at the same time employment in worked to keep the building from falling Drumm outside Massachusetts is falling dramatically. down, and continued to learn about the The ability of analysts to “make the call“ concerning the actual state of our economy Kenyon Corn Meal milling process from Charley Walmsley, has been greatly complicated by data difficulties. Not only do we continue to operate in Co. They are the who worked as the miller at Kenyon for the environment of a service and information economy, with its non-traditional patterns, 12th owners of the 66 years, following his father Ed’s reign but the the war with Iraq, higher oil prices, and atypical weather have caused major mill, which dates of 50 years. problems with the data that persons generally follow to gauge the economy. back to the 1690s. Charley, the Drumms say, was 12 I do not think Rhode Island has indeed entered the early stages of a double-dip recession. I believe we will remain close to sliding into recession for several more when his father asked him to skip school months, but that activity here and nationally will progress to a more well-defined one day and help at the mill. Charley upward direction. never returned to school, working at the n Leonard Lardaro is a Professor of Economics at the University of Rhode Island. 2
  • “ What are the lessons I’ve learned over the years?” Pinelli asks. “I’m just a street per- son. I just learned to never give up, to be persistent, to remain focused, and to have fun…I have no regrets. I’m loving my life. Everything’s great.” Bill Pinelli (right) and partner Steve Mara at The Grille on Main Bill Pinelli exchanged rented a chair and shuttled between “Steve always dreamed of it being a in East Greenwich. the two businesses. restaurant. Our story is amazing. We scissors and comb for a “I eventually realized that the only never knew each other. We sat down spatula and chef’s hat. way to do something properly is to give once. We shook hands the third or fourth it 100 percent attention,“ Pinelli says. time we sat down, and became business “By 1990 I was in the deli full time. It partners. Then we became friends, now About 15 years ago, after well over taught me how to run a business. If it we’re neighbors and he’s like family. two decades in the same business, Bill weren’t for my family helping me out we “I don’t think I could have ever done Pinelli felt it was time for a change – would have never made it. We almost it without Steve, with his financial back- and what a change it was. lost it twice in the first five years.“ ground, and I don’t think he could have He was turning in his scissors for a After seven years, Pinelli’s deli done it without me.“ spatula, giving up on the hair stylist became a café, and a popular destina- What they’ve done includes the business that had led to ownership of tion for many area residents. Among opening of the Post Office Café in East two salons, for a small deli in a strip those customers was a young man, Greenwich in June 1994, followed six mall off Route 2 in West Warwick. Steve Mara, who also had a dream. He months later by the transformation of Executive Profile Where it led him was to join forces owned Alias Smith & Jones on Main Alias Smith & Jones into The Grille on with another entrepreneur, Steve Mara, Street in East Greenwich, a bar that Main, also in East Greenwich. Their and to a restaurant business that continues catered to loud music and young crowds. restaurants now stretch from North to grow and will reach nine restaurants His family also owned the old post Providence to Kingston, with their in Rhode Island this year. office on Main Street. Once the post eighth and ninth facilities set to open For Pinelli this is a story of persist- office relocated to another part of this year. One is on Route 2, near the ence and determination, of someone town the building became home to a Warwick Mall, and the other is in the who was convinced that you simply few offices and an antique store. Mara former Bookstore Café at Wayland don’t give up. It has been quite a journey envisioned the post office becoming a Square in Providence. for the gregarious Pinelli. From a young restaurant. He turned to Pinelli, a stranger When the two new restaurants man still in his teens – 18, married with a and asked him to be his partner. open, the Pinelli/Mara Group will child and headed for barber school, “He just gave me the employ 350 people – people that Pinelli earning $15 a week. keys to go and look at considers family. “ I just wanted to do something He would go on to it,“ Pinelli says. “It was “What are the lessons I’ve learned else. Food has always been see pay increases to a deserted old post over the years?“ Pinelli asks. “I’m just a part of my culture.” $25 and then $40 that office. Three, four street person. I just learned to never give enabled him to buy a times I went in there up, to be persistent, to remain focused, “wrecked car“ and move his young and it just hit me that it would make and to have fun…I have no regrets. I’m family into their own apartment. He a beautiful restaurant.” loving my life. Everything’s great.“ n would become a hair stylist, and eventually own two salons – Heads Up BankRI’s Lending Directory on Oaklawn Avenue in Cranston and BUSINESS LENDING: Kevin Kelly, Sr. VP, Department Manager, Headliners in Pawtucket. kkelly@bankri.com • Dan Hagerty, Sr. VP, dhagerty@bankri.com • Mike Kerr, It was a career that served him well Sr. VP, mkerr@bankri.com • Manny Barrows, Sr. VP, mbarrows@bankri.com • for 26 years – until he decided it was James Tiernan, Sr. VP, jtiernan@bankri.com • James Kelshaw, VP, time for a change. jkelshaw@bankri.com “I knew that eventually when I got COMMERCIAL REAL ESTATE: Stephen J. Gibbons, Sr. VP, Department Manager, out from behind the chair cutting hair sgibbons@bankri.com • Laurel L. Bowerman, Sr. VP, lbowerma@bankri.com • I wanted to make money,“ Pinelli says. David R, Cunningham, VP, dcunning@bankri.com “Cutting hair you can only make money SMALL BUSINESS LENDING: Don DiBlasi, VP, Department Manager, with the two hands you can cut hair ddiblasi@bankri.com • Joseph Hindle, VP, jhindle@bankri.com • Andrew with. I just wanted to do something Deluski, AVP, adeluski@bankri.com • Joseph Sheehan, AVP, else. Food has always been part of jsheehan@bankri.com my culture.“ CASH MANAGEMENT: Mike Regnier, VP, mregnier@bankri.com With the support of his family he opened Pinelli’s Deli in West Warwick. We welcome your input.You can email your comments, suggestions and letters to Christopher J. Cannata, Commercial Marketing Manager, It was conveniently located next to a at ccannata@bankri.com. You can also see this newsletter online at hair salon, Whispers, where for the first www.bankri.com two years of the deli business Pinelli 3
  • Merrill Sherman, BankRI Chief Executive Officer, honored by BANKRI NOTES the National Jewish Medical and Research Center. Merrill received the prestigious National Jewish Humanitarian Award at a BUSINESS RI SPRING 2003: luncheon at the Biltmore Hotel in Providence in April. The award recognizes GROWTH people across the country who have made significant civic and charitable contri- RECOGNITION butions. Winners exemplify what an individual can do for his or her community. EXPANSION BankRI opens Lincoln Operations Center. In a major move to accommodate its growth, the Bank opened a 20,000 square foot operations center on Washington Highway (Rte. 116) to house Thanks a Billion! deposit operations, loan underwriting and servicing, MIS, and training. Bank Rhode Island announced earlier this year that it had attained a BankRI announces major data processing conversion to Fiserv CBS. milestone in 2002, growing its total asset base to more than $1 Billion, After seven years with Bisys, the bank announced its plan to convert its double the total asset base when the bank was formed in 1996. data processing and systems requirements to Fiserv over Memorial Day BankRI receives the Encore Award. weekend. The bank also plans to implement the InformEnt data warehouse The Arts and Business Council of Rhode Island awarded Bank Rhode Island system to improve its reporting and data analysis for call center and customer its highest honor for its sponsorship and continuing support of the arts. service quality initiatives. Spotlight On The Arts All Children’s For the All Children’s Theater it’s not ACT’s home is in an unpretentious Barrington, East Greenwich, and at the Theater about developing Broadway actors or one-story building on Valley Street in University of Rhode Island in Kingston. Hollywood stars. It is about building East Providence. There’s enough room There’s the summer academy, held on the character, the kind that will stay with for rehearsal space and offices. And it’s Providence Country Day School Campus in youngsters whether their dreams ulti- large enough to house the theater’s four East Providence, and acting groups for all mately bring them to Broadway or Wall full-time employees, plus part-timers and levels and all ages. Street. It’s not so much about reciting a volunteers who are involved in everything “They come from all over the state, line perfectly, as it is about responsibility, from the acting ensemble to a variety of with different backgrounds,“ Joanne says. accountability, leadership, and self-esteem. educational and outreach programs. “What they have in common is ACT.“ “Our mission is to provide a total In any given year, ACT will serve 900 Together, these children from varied theater experience where the kids grow to 1,000 kids who participate in acting backgrounds – from the wealthy neighbor- and develop through drama, where it’s classes, the performing ensemble, winter hoods of Barrington and East Greenwich not only to entertain but to educate and and spring vacation camps, summer theater and the urban centers of Providence and to empower,“ says Joanne Fayan, ACT’s academy, a playwriting competition and Woonsocket – create magic, the likes of which associate artistic director. festival, and outreach programs. that sometimes only children can attain. ALL CHILDREN’S THEATRE “The children learn all aspects of the The theater has a full array of educa- “There’s just an amazing thing that ENSEMBLE, in its 16th season theater – how to be on stage, the skills tional opportunities, some held at the happens when you walk into a room full of 127 Valley Street they need to direct, run lights, do back- East Providence facility, others at sites in kids,“ says Elizabeth Baker, ACT’s education East Providence, RI 02914 stage, run front of house – those skills and outreach director. “It’s a type of energy teach responsibility, leadership, and you don’t find anywhere else.“ 401-435-5300 cooperation,“ Joanne says. “The students It’s the kind of energy that translates into Web site: www.ACTinRI.org develop self confidence, self esteem. a few of ACT’s graduates pursuing perform- email: ACTinRI @ aol.com They research, they write. When they’re ance careers in Los Angeles and New York. ready to interview for college or for a It’s the kind of energy that influences a job, they’re more poised, well spoken boy from a housing project, teaching him and have a whole array of things in accountability, leadership, and responsibili- which they’ve been involved. They will ty in a nurturing community that helped be strong candidates.“ him achieve his goal of attending college. These are the lessons that ACT has It’s the kind of energy that inspires a been teaching thousands of Rhode Island Down’s syndrome teenage girl to want to children, ages four to 18, ever since its learn about theater and become, at 18, a founding by Wrenn Goodrum in 1987. “ There’s just an participant in the ACT program. Wrenn, ACT’s artistic director, is a graduate amazing thing It is, as ACT’s literature suggests, where of the North Carolina School for the that happens students develop life skills and learn to use Performing Arts. She came to Rhode when you walk their imagination and creative energies. Island from New York City where she into a room Where as Joanne suggests, “kids simply was an actress and children’s theater full of kids.” director for 10 years. take center stage.“ n n We treat your business like big business. www.bankri.com Member FDIC 4