Washington County healthy and optimistic
As 2006 enters the homestretch Washington County’s economic outlook is upbeat but cautious.
High unemployment is not an issue, but retail remains problematic for downtown Barre. The granite industry, facing challenges from overseas, is stable. Government, a main source of activity for Montpelier chugs along, as does its powerful insurance sector. The economies of Waterbury, Northfield and the Mad River Valley appear healthy. All in all, this stands as a healthy end to the year in a business sense.
There are also new players at the helm of several local economic organizations, or new faces not yet hired who will fill empty posts in the near future. Susan “Sam” Matthews now heads the Central Vermont Economic Development Corp, and is the first woman to take the helm since having taken over this summer from the retired Richard Angney.
“In Washington County we face a number of the challenges similar to the rest of Vermont regarding energy, workforce development issues and the graying of Vermont as well as helping our businesses remain competitive,” explained Matthews.
The locally strong manufacturing sector is challenged with the local granite industry a primary challenges. However, she can point to Green Mountain Coffee Roasters in Waterbury as a growing company.
Matthews sees “a good share of entrepreneurial business and the agricultural sector very strong.”
“We have a core ribbon of population density from Waterbury to Barre and then surrounded by a rural landscape and agricultural sector,” she noted.
A challenge for the county is maintaining its landscape and “gentle footprint” and for business “to enhance our telecom sector.”
With Verizon trying to get out of the landline service business, she said the county and state “have a concern and it’s a priority to strengthen the telecom infrastructure.”
“I see the 23 municipalities here having a strong sense of community,” Matthews noted. “I see the communities working hard at collaboration and unifying around a common vision and action steps to move forward to secure their economic well being.”
George Malek, a long time observer and mover of the local economy at the Central Vermont Chamber of Commerce, said there are new people, like Matthews, working on restructuring and reorganizing the economic development efforts in the county.
There have been coincidental turnovers in three local directors slots at Barre Area Development Corp., CVEDC and The Barre Partnership, and this has led, he believes, to “everybody reassigning goals and priorities and what the niche is in this changing world and how to cope and address it.”
Malek said the major economic issues here He in “wanting to hang on to our manufacturing, supporting our educational institutions, attracting tourists, and strengthening our downtowns.”
He categorized broadband access in the county as “good but not perfect.”
He said this “is a critical missing element for those without it. Five years ago you were ahead of the pack, today with out high speed you are behind the curve.”
“We have to continue aggressive efforts to get broadband rapidly and expansively,” he argues. “We need efforts for community wireless and reaching places on the short end of the fiber optics.”
“We’re holding our own better than the national average,” says Malek of the local manufacturing sector. “We have a challenged but a unique industry in granite.”
“God bless Northern Power,” he quipped. This is the company that has purchased and occupies much of the former Bombardier Plant in Barre Town. He said Northern Power “brought back the Bombardier plant from its idle status.”
Malek sees Montpelier’s insurance sector as “very strong but challenged by low interest rates.” He says this has been a difficult period for an industry dealing with “their degree of risk.”
On the employment front, Malek points to a tight housing market that is “Making it very challenging. Business can’t afford the wages people need to afford the houses.”
“We need houses,” Malek emphasized. “We need to recognize and accept that houses are good for everybody involved. We are not holding our own in construction employment.”
Washington County, averaging 3.7 per cent unemployment this summer, ranks fifth least in unemployment in the state and third in numbers employed. According to Andy Condon at the Department of Employment and Training, the labor force has been growing in the county and this year the average labor force through August was 35,850, up from 2005 by 1,100 people.
Condon said job growth here “has stayed pretty healthy from 2004 to 2005.” (The latest figures available.) Jobs increased 1.1 percent as compared to 0.8 percent in the state average average. The biggest job sectors are retail trade, health care and social assistance, leisure and hospitality, manufacturing and financial activities. The retail, health care and leisure sectors grew by 189 jobs while manufacturing and financial sectors shrank by 147 jobs. The five sectors account for 50 percent of the jobs and combined they grew 42 jobs.
The fastest growing industries here are utilities up 14 percent, accommodations up 12 percent, fabricated metal manufacturing up 11 percent, heavy and civil engineering (road) construction up 11 percent and, amusements and recreation up eight percent for a total 123 jobs.
Condon categorized overall job growth here as “slightly faster than the state.” Sectors that are losing, he said, are those declining both state and nationwide which includes manufacturing. The ones that are gaining such as health care also follow the statewide and national trend.
“The county follows national trends,” said Condon. “Labor force wise and population wise, it’s a growing rather than a shrinking county.”
Summing up employment here Condon said, I didn’t see anything that was unusual compared to the rest of the state. The strengths and weaknesses are the same as in the rest of the state.”
Barre Town and Barre City
Barre City faces problems with its downtown retail sector with several prominent empty storefronts. Among them is the former Lash Furniture store and the former Brooks Drugs store.
Barre Area Development Corp’s president Walter “Skip” Poczobut, with the Chittenden Bank, categorized 2006 as “a tough year. There are a fair amount of empty storefronts in the downtown area.”
Barre City is hoping to fight the box store onslaught that has weakened this downtown with new infrastructure that will repair streets and lighting, a project 20 years in the planning. Expected to begin in 2008, Poczobut said local retailers are nervous because streets will be torn apart and shoppers might avoid the construction.
He is also concerned about the former Lash Furniture building owned by local real estate mogul Alan Goldman, which has been vacant for over a year.
On the other hand, Lenny’s Shoes has made the former Grand Union building, which it shares with the relocated Brooks Drugs, a downtown shopping hub.
Walgreens, he said, is interested in coming into town, a healthy sign for the city’s stock of businesses. BADC attracted Nichols & Dymes, a variety store from the Berlin Mall, and, according to Poczobut, empty storefronts “may be more reflective of the building owner than the economic climate.”
Barre landlords, he said, charge an average rental price on Main Street of $8 to $12 per sq foot. “We have a huge market of 40,000 households in central Vermont,” he noted.
On the upside, said Poczobut, the city is developing niche markets especially in specialty food stores and concepts. For example, Ariel Zevon (daughter of the late singer Warren Zevon) has opened a business and would like to do a year round farmers market and a cafe, while Stevens Homebrew is looking to open a microbrewery downtown.
“We have talented energetic entrepreneurs,” said Poczobut. “You can’t import the specialty food market, we produce it here and the Vermont brand is very strong.”
“We’re really concentrating on specialty food industry,” he explained. BADC is currently pitching the Vermont Food Venture Network to relocate its offices to Barre from Fairfax.
Barre Mayor, Tom Lauzan, is a major booster for the city’s economy and a prime mover as a developer. He calls the former Rouleau Granite building in the downtown, “an absolute success story.”
Lauzan’s company, Metro Development, purchased the building 18 months ago, renovated the 110,000 square foot facility, and now has 10 tenants putting it at full occupancy. Among the businesses in the complex are Vermont StoneArt, which fabricates kitchen and bath countertops, Architectural Woodworking a custom cabinetry and Millwork shop, Global Values a stone importer, and JC Housewright a custom roofing and sheet metal fabrication business.
BADC is looking to recruit a new executive director and is responsible for the Wilson Industrial Park and the Malden Mills Building in Barre Town as well as the Allen Street Park and former Beck & Beck facility in Barre City.
The Wilson Industrial Park, said Poczobut “is getting there.” BADC owns 1/9 of the park in conjunction with Barre Town. Tenants include The Vermont Food Bank, Hillside Granite a counter manufacture, Vermont Butter and Cheese who wants to expand, while the incubator building at 37,000 square feet, is “doing great now with Cabot Cheese as a tenant.”
MacCauley Wholesale Meats, and other businesses occupy the Malden Mills building. In downtown the Allen Street Park a light industrial area owned by the Lord family of EF Wall Construction, is not faring as well and is currently unoccupied.
Northern Power, who moved into the former Bombardier Plant in the Wilson Industrial Park a few years back after that major employer departed, has purchased the facility and, said Poczobut, hopes to occupy the whole plant.
BADC is marketing as best it can. “We attempted to use the Vermont Expo in Burlington but we didn’t get much of a reaction from business wanting to relocate to central Vermont itself,” he admitted.
Matt Lash, the youthful executive director at 24 if the Barre Partnership, has been at his job a year. “Many downtowns have had difficulties as well as Barre,” he said. “This is a very resilient community,” he added. “We have a number of merchants here many years.”
Lash sees the key issues for the city in vacant storefronts. The partnership, he said, deals chiefly with events in downtown including Homecoming, the Green Mountain Motorheads Spring Fling, summer concerts in the park, a tailgate sale and other events aimed at bringing people to the city center. Earlier this year Lash obtained $22,000 grant from the US Parks Service to do a downtown marketing program. The Partnership has also helped the city secure grants for a new sidewalk on Summer Street and a city hall park renovation due in 2007 that will refurbish the 100-year-old gazebo.
“Given the current picture where downtowns feel the strip mall pinch,” said Lash, “we have done relatively well and have weathered the storm. We have several merchants here upwards of 20 years. We have two jewelry stores, two locally operated hardware stores, a shoe repair store. We have an historic nature in our downtown.”
He also points to the Vermont Historical Society, the old Labor Hall, Studio Place Arts, Rocks of Ages and Hope Cemetery as attractions for tourists.
The city is faring well economically, he said. “In 2006 I’ve done half a dozen business grand openings. I know there are companies who want to locate here, the problem is matching them up with available space in the downtown.”
Barre’s granite industry is holding its own although, according to Barre Granite Association president Judy Chatot, the first woman to head it, “night now we are struggling with the imports.”
This means cheap stone from China and India and lower employment levels as there is less work here. She said business at the sheds, in general, has slowed down and there has been layoffs. “Our biggest problem is not having resources to educate the public to Vermont craftsmanship,” complained Chatot.
“We need money to educate the public and to market ourselves. The margins are relatively slim. “The money we make we use to make ourselves more efficient and invest in the newest technology.” She points out that courses in the stone trades have been cut from the Barre Area Vocational Center curriculum. Workers in the industry are aging, and those still wanting to work here receive on the job trading.
Chatot, who owns North Barre Granite with 27 employees, down from 45 during the 1970s, said “her company, and the industry as a whole “never really had the resources to market ourselves. We assumed everybody knew we were the best.”
She predicts that for the next five years “the industry will keep plodding along. We will keep healthy as the boomer generation grows older. The boomers will help the industry in that they will question the imports and look at the finer things.”
Cremation, which has also hurt the monument industry, she said may not affect the baby boom generation since “you need a place to go and grieve, you need a place for closure, a place to reflect and the boomers will be sensitive to that.”
The BGA has 80 members, 34 are voting members and manufacturers. Employment is down slightly with approximately 1200 employed in the industry.
“I think the industry has a solid base over time but it fluctuates,” said BGA executive director John Castaldo. He sees the core of the industry intact and strong. “While imports are still a big factor there seems to be some slight change from consumers looking at quality as much as cost,” he noted.
Marketing, never a strong point at the BGA, is being looked at. According to Castaldo, “we’re going to start trying to get out there. We recently signed a contract for promotional work and starting to reach out to local newspapers and TV. We are getting stories in the NY Times and Fox News Network in Hartford, and hope to get more of that so people can see quality.”
The Capitol City appears to have a healthy economy with few ripples. Downtown retail appears strong with few empty storefronts. A walk around the downtown shows a new bridge nearly completed on Langdon Street, one major empty storefront at the former Chittenden Bank building that was Capitol Coffee for several years until that business moved one block, and name changes at a few eateries, but nothing dramatic to mar the business landscape.
Important here is the health of National Life of Vermont and the fate of the Vermont College campus currently owned by Union Institute.
At National Life employment is at 850 down a couple hundred since 2001. Brian Vachon who has headed communications here for 25 years and is retiring in December said employment is now level. “If we add to staff it’s in the asset management area of mutual funds.” The big news here is that Vachon’s successor will be Chris Graff, the former head of the state’s Associated Press branch.
Vachon said his company is “finding that life insurance sales are very strong with new attractive products. Annuity product sales are flat, mutual funds are doing OK…. We are putting a lot of emphasis in this area.”
This largest private employer in Montpelier is “going to have a very strong year, maybe not a record, it’s too soon to say.” According to Vachon, “the fourth quarter is always the biggest for financial services.”
The biggest real estate news emanating from the city this year has been the attempt to sell the 32 acre, 11 building college campus generally known as Vermont College which is owned by The Union Institute and University headquartered in Cincinnati, Ohio.
That school wants to sell the campus here and move its operations to its Brattleboro site. A deal to sell it to the University of Vermont fell through this spring. UVM said in late May that budget constraints made its plan to expand into Montpelier unworkable.
“We’re just selling the property and potentially some programs perhaps the MFA program,” said school provost Rich Hansen. UIU is working with seven potential buyers and “our trustees would like some indication by the end of 2006,” he said.
Hansen said the school wants to be able to devote resources to academic programs and faculty not real estate. We don’t need to own the property for our type of low residency programs.”
The school, with its 140 employees both full and part time, is not departing Montpelier and may remain if a lease back arrangement with a new owner can be worked out.
Tom Pelletier, President of the Northfield Savings Bank, said Northfield’s prosperity remains tied to the health of Norwich University. “The college drives the local economy as does the local employers doing well.”
That school is expanding and renovating its campus with a $27 million Student Center, the largest campus project in a decade.
The National Center For The Study of Counter Terrorism and Cyber Crime, affiliated with the university, continues to expand as their work continues to grow.
Pelletier points to local companies such Barry T. Chouinard a T-shirt manufacturer, Wall Goldfinger, a high end office furniture manufacturer whose president John Wall was this year’s SBA small business person for Vermont, and Cabot Hosiery as “companies that continue to be leading employ ers in the community.”
This town of 4,500 residents has not had much population growth and remains stable. The university has 1800 students. The bank Pelletier heads has recently completed its fivebranch expansion in Chittenden Count and now has a total of 13 branches. The bank employs 145 people, 75 of them at its Northfield headquarters.
Pelletier said Northfield’s small downtown currently has no empty storefronts and there are a new bike and sports shop and new coffee and pastry shop here. “The local economy here is doing quite well,” he reports.
Waterbury is home to Green Mountain Coffee Rosters and the Pilgrim Industrial Park where Building Five was recently completed. According to Steve Van Essen of the Pilgrim Park Partnership and a long term Waterbury businessman, the park is full. “The demand exceeds the supply.”
Currently occupying the new building is the editorial office of Dartmouth Journal Services, a scientific and medical journal business. Also here is Canus (Canada US) a company that sells and distributes skin care products made from goats milk.
The restored Waterbury Railroad Station grand opening was held October 14. At a cost of over $1 million the newly refurbished station will house a Green Mountain Coffee Roasters cafe and a Welcome Center funded through state and fed grants and GMCR.
Waterbury is working toward a downtown designation that will provide new opportunities to apply for grants and other upgrade projects for the community, said Van Essen.
There is also a new branch of the Merchants Bank ad adjacent to the new Shaw’s supermarket on Route 100. He also points to GMCR and Rome Snowboard in the former Alcazar Silo building as “showing substantial growth.”
“In general,” said Van Essen, “the long term future is bright. This is based on our critical location and arterial access to a broad labor market. Currently the economy has never been better.”
The Mad River Valley
The big news in the Mad River Valley is the development at the Sugarbush ski resort. Called the Claybrook Project, there are new condominiums, the first since the 1970s. According to Sugarbush Chamber of Commerce executive director, Susan Roy, the summer here at the ski slopes was formerly “desolate.” With the new hotel and base lodge improvements (discussed in last month’s Vermont Business Magazine,) she said the resort will “revitalize the area because it’s never really been a summer location.”
Construction at the resort has produced an “uptick in business at the gas pumps, convenience stores and some of the lodging places on the mountain.”
“The public relations of being in the news and having something new and different is unique and a long time coming,” said Roy.
The second home market here remains very strong with Fayston now the town ‘in the spotlight with subdivisions and building. There are a lot of requests for subdividing and intent to build.”
One of the Valley’s non-ski related businesses, Small Dog Electronics an Apple Computer retailer, has opened a new retail store in South Burlington.
“Our business is doing great,” said owner Don Mayer. SDE expanded because customers asked for a presence in Chittenden Co.
The move outside of Waitsfield, said Mayer, is partially due to “some difficulty in expanding our presence in Waitsfield. We can’t get proper zoning to have reasonable hours for our retail store. We are zoned 10-6, we want to be open later and have hours on Saturday and perhaps Sunday, The town doesn’t really appreciate this location is really a business location although it’s been commercial for four decades.”
Small Dog employs 30 people with sales over $20 million this year. Mayer said it is unlikely he will expand his business further in the Valley and more likely it will expand in Chittenden County.
“It’s a shame that businesses with non-tourist jobs can’t expand locally,” said Mayer. “They have a more stable employment base.”
He sees local towns “struggling with the competition of making things the way they were and allowing for reasonable growth of businesses.” He said growth here, for nontourist related businesses is difficult and he pointed to those who have left the Valley including Mad River Canoe and Green Mountain Coffee Roasters. “There are a lot of hurdles to growing a business in this town. It seems to be almost an antibusiness atmosphere if its not tourist related.”
Kurt Gruendling at Waitsfield Champlain Telecom, said his company is healthy and growing. Currently WCT employs 94, the majority in Waitsfield, some in Hinesburg and Richmond. It has over 20,000 subscribers and 21,000 access lines. It provides telephone, long distance, high-speed Internet and cable TV services in the Mad River Valley and Champlain Valley areas.
Its service area in Washington Co. is 693 square miles and, Gruendling said “only three people can’t get access to high speed access. We have over 40 percent penetration of high speed Internet which continues to grow.”
In the WCT business plan there is a strong focus on getting high speed to everyone. “We are on the next generation piece to invest in the technology and upgrading the speed of broadband. We’re looking at building the next generation of the network and upgrading switching sites.”
Gruendling doesn’t agree with Mayer’s assessment of the Valley as business unfriendly. “The overall business climate here is pretty good with a lot of anticipation of the ski season. In the ten years I’ve been here the economy has really diversified.”
Also strong here is Bosch Water Heating formerly Controlled Energy. The company sells high-energy efficiency tankless hot water heaters.
Located in Waitsfield it employs 50 and is the sales and marketing sector for Bosch Water Heating, a multinational German company.
“Business is great for our industry and sales increasing rapidly,” said company spokesman Dan Moffroid. “The industry is seeing a 30 percent increase yearly in tankless water heaters with energy issues pushing the market.”
Moffroid, who grew up in the Valley and serves on the Chamber of Commerce, said the area is “so dependent on tourism and that depends on snow.”
“I’m concerned that the overall economy is shaky due to Sugarbush and Mad River if they have an off year.”
The former Mad River Canoe Building is now the Irasville Business Park, a 35,000 square foot building that was empty two years until purchased by Robin Morris, a British born business entrepreneur, and Vince Gauthier.
Currently this incubator is home to several businesses including, Liz Lovely Vegan Cookies, an expanding natural foods company, Vermont Morning Cereal a hot breakfast cereal, American Flatbread which has freezer space and a loading dock here, Vermont Raw, a dog food manufacturer, eColor Printing, a specialty color printer, Woonsocket Brush Co. a specialty brush manufacturer and Houseneeds Inc. a plumbing and heating distributor.
The building is now full reports Morris. He said the success of the business park is due to the fact that, “a lot of people have moved to the Valley and want to live and work here. This building allows them to live and work here without having to travel outside the local area.”
Copyright Boutin-McQuiston, Inc. Nov 01, 2006
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