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Visions for economic rebound face tough odds

Western Mass. hopes computing center will be the catalyst for a turnaround

Economic developers hope a new computing center will help spur a revival in Holyoke, one of the state’s poorest communities.

Yoon S. Byun/Globe Staff

Economic developers hope a new computing center will help spur a revival in Holyoke, one of the state’s poorest communities.

HOLYOKE - The sprawling construction site, bustling with yellow safety-vested workers and roaring, orange earth-moving machinery, is an island of hope amid still canals and silent mills.

This is the future home of a massive cluster of powerful computers, a project led by a consortium of universities and technology firms that will give researchers access, via the Internet, to vast amounts of computing power. When construction is completed late next year, the $163 million Green High Performance Computing Center will create just a handful of permanent jobs to oversee operations and maintenance of the block-long array of networked computers.

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But state and local officials hope the development will become the catalyst for more - much more.

The computing center - a joint venture of Harvard, MIT, Northeastern University, Boston University, the University of Massachusetts, and corporate partners EMC Corp. and Cisco Systems Inc. - is the key piece of an improbable dream to create technology industry in this long-declining city and bring the innovation economy to Western Massachusetts. The state so far has pledged some $40 million to support the project, including nearly $15 million in financing announced 10 days ago, as planners envision abandoned, 19th-century mills humming with start-ups, coffee shops buzzing with young entrepreneurs, and venture capitalists trolling for investments.

But these dreams face the hard realities that have long plagued efforts to plant a technology industry in this region: a shortage of skilled workers, relatively low education levels, and the distance from the technology and venture capital hubs in Boston and Cambridge.

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“Gaining traction on the slope of economic development is very difficult to do,’’ said Robert A. Nakosteen, a professor at the Isenberg School of Management at UMass Amherst who studies the Western Massachusetts economy. “This computing center is a positive thing for Holyoke, but it’s a penny in the ocean. If it’s the start of anything, it could take a generation or two to happen.’’

Holyoke, one of the state’s poorest cities, seems the least likely place to nurture an innovation cluster. Nearly one in three people in this city of 40,000 lives below the poverty line, triple the state’s poverty rate, according to the census. Nearly half speak a language other than English at home, compared with 20 percent statewide. Only 21 percent of Holyoke adults over 25 have a bachelor’s degree or higher, compared with 38 percent in Massachusetts.

Its schools are among the lowest performing in the state. In March, Commissioner of Education Mitchell D. Chester warned Holyoke to improve schools significantly or face a state takeover.

Even under the best of circumstances, growing an innovation cluster from scratch is a high risk enterprise in which successes are rare. Creating a Silicon Valley or Kendall Square is an easy idea to percolate in a city hall conference room, economic development specialists said, but very difficult to make happen in the real world.

Edward Glaeser, a professor at Harvard University, where he studies the economics of cities, said innovation centers like Silicon Valley and Kendall Square grow organically, a bottom-up process in which talent, skills, invention, and capital mix to create an entrepreneurial ecosystem greater than the sum of its parts.

“Clusters are very hard to create from the top down,’’ said Glaeser. “A lot of places have cheap energy and lots of land. What you need is lots of smart people connected by proximity.’’

Lower cost energy was a factor in Holyoke’s selection as the site for the computing center, which will consume tremendous amounts of electricity. Holyoke’s municipal utility, which operates a Connecticut River dam, provides hydroelectricity at commercial rates about 30 percent below the state average.

The city is also located near important transportation corridors, both real and virtual. The east-west Massachusetts Turnpike crosses the north-south I-91 within a few miles of Holyoke, while two data trunk lines run along highways to enable high-speed, remote access to the computing center.

In addition to $40 million from the state, universities in the consortium are investing $50 million in the project. EMC and Cisco will contribute $2.5 million each. The computers, to be owned by the universities, are expected to cost at least an additional $68 million.

James F. Kurose, a professor at UMass Amherst, said the computer center will allow researchers in a variety of fields to model complex, real world phenomena such as proteins, ocean currents, and climate. He believes the center will inevitably attract new investment to Holyoke.

“I could see testing facilities set up shop in this area to take advantage of the abundant electrical and computing power,’’ he said. “I could see large-scale battery companies locate in Holyoke for the same reasons.’’

Holyoke officials, meanwhile, are planning an “innovation district’’ around the center. Just last month, a 32-member task force approved an ambitious eight-point strategy that includes workforce development, improvement of sites that have potential to attract businesses, and the encouragement of entrepreneurial activity.

Kathleen Anderson, director of Holyoke’s Office of Planning and Development, acknowledged the city faces significant challenges, but said that Holyoke, once in the vanguard of industrial technology, has “history of innovation is on our side. We’re an invented city, and we’re re-inventing ourselves now.’’

Holyoke advocates also note the city sits in a region that is home to UMass as well as Amherst, Hampshire, Smith, and Mount Holyoke colleges, sources for the highly educated workers that drive technology.

Real estate developers like John Aubin are already banking on a Holyoke resurgence. Aubin redeveloped a complex of seven attached mill buildings down the canal from the computing center site. The meticulously restored buildings, with high ceilings, industrial columns, and burnished wood floors, have so far attracted more than 50 tenants, ranging from design and technology start-ups to artists, yoga instructors, and dancers. “It’s going to happen,’’ Aubin said of Holyoke’s comeback.

Holyoke has a year to prepare for the computing center, scheduled to open by the end of 2012. At the center’s construction site, Van Duros, the senior project manager for Turner Construction, is already noticing new signs of life.

“A few patio umbrellas have appeared outside that warehouse over there,’’ he said, pointing to a weathered mill building. “And we’ve just discovered a good, new pizza place down one of the canals. Things are starting to sprout up.’’

D.C. Denison can be reached at denison@globe.com.
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