by Bruce Edwards, Vermont Business Magazine Windsor County and the Upper Valley don’t have much to complain about. The county posted a June unemployment rate of 2.6 percent (not seasonally adjusted), one-tenth better from the prior year, and slightly better than the state’s rate of 3.0 percent (Vermont’s seasonally adjusted unemployment rate is 2.8 percent; county rates are not adjusted.)
Within the county, the Labor Market Areas saw rates from 3.6 percent in Woodstock to 3.3 percent in Springfield, and a painfully low 2.1 percent in White River Jct, by far the lowest in the state.
According to the US Census Bureau, the county’s household median income in 2016 was $54,763 which is below the state median of $56,104.
There are plenty of jobs available in all sectors from manufacturing and health care to recreation and retail.
But like the rest of the state or for that matter New England, the number of jobs available far exceeds the number of workers. Tied to that is the shortage of affordable housing needed to accommodate workers.
Housing
“If you’re an employer looking to attract employees to the Upper Valley, many of those with whom we speak are struggling with employees and prospective employees coming up and being surprised how expensive it is and how difficult it is to get housing,” said Andrew Winter, executive director of Twin Pines Housing.
The Upper Valley includes parts of Orange County and the neighboring towns in New Hampshire.
Winter said rents continue to climb in the region with newer units renting for a premium over older units that are not always in the best shape.
According to the latest report from the National Low-Income Housing Association, an annual income of $42,960 is needed to afford a two-bedroom apartment in Windsor County with a fair market rent of $1,074 a month.
Statewide the fair market rent for a two-bedroom apartment is $1,165.
Twin Pines owns 417 apartments in the Upper Valley for low and moderate-income individuals and families.
The nonprofit housing group is adding to that list with three projects under construction.
Winter said an 18-unit building undergoing renovations in Lebanon, NH, (across the Connecticut River) is targeted toward the chronically homeless.
Twin Pines is also building a 30-unit, mixed-income apartment building in White River Junction on Sykes Mountain Avenue. He said the apartments will serve families and individuals making as little as 50 percent of the area median income and as much as 120 percent of the area median income.
“The Upper Valley, because of its proximity to Dartmouth College and Dartmouth Hitchcock Medical Center, we’re seeing demand among higher income folks for housing,” Winter said.
He said nine of the 30 units will be set aside for people making 80 to 120 percent of the area median income.
The U.S. Census Bureau pegs the median household income in the county at $54,763.
Twin Pines has plans for a second phase with another 12-18 units.
The current project is being funded in part by a state bond issue that was passed last year by the Legislature.
The third Twin Pines project is a three-story, 29-unit apartment building in West Lebanon, N.H., on Tracy Street.
Winter said the one and two-bedroom apartments are geared toward people making 50 percent to 60 percent of the area median income.
Although new affordable apartments are part of the solution, Winter said renovating older housing stock has to be part of the mix.
“We can’t build our way out of it,” he said.
Peter Gregory, executive director of the Twin Rivers-Ottauquechee Regional Commission, said because of the housing issue many people are forced to commute “a fair distance” to their job.
Kevin Geiger, a senior planner with the commission, said housing is a key component for economic development in the region.
Geiger said the commission is working with its partner regional planning commission in New Hampshire to undertake an in-depth affordable housing study that goes beyond the numbers.
He said a joint study would look at locations, impediments to building, social impediments, and asking developers why more housing units aren’t being built.
Geiger said based on past studies the region needs 4,000 additional housing units. He said that’s tied to the shortage of workers.
“We know in our region we have unfilled slots because they can’t find housing,” he said.
Private developers are also taking steps to address the housing crunch.
Just completed is a $4.5 million mixed-use building at the corner of Bridge and Main streets in White River Junction.
The project was undertaken by local developer Bill Bittinger who purchased the vacant property after a fire in 2005 destroyed the existing building.
The four-story building has 16 one-bedroom apartments on the upper floors and retail on the street level.
Bittinger, who has been doing redevelopment projects for more than 25 years, said the project was funded with the help of two federal housing programs.
“The people who have come and rented to date … people who are working within a block or two of where our building is and they can obviously walk to work,” Bittinger said.
He said the building is energy efficient, employing electric heat pumps with plans to build a solar array off-site next year.
Bittinger said other efforts are being made to increase the affordable housing available.
“It’s harder today for a lot reasons to do it,” he said. “The cost to build is relatively high here, relative to incomes etc.”
He added the Upper Valley has a higher percentage of households that are single-income households which makes it more difficult to live than a two-income household.
On the economy, Bittinger said he’s been encouraged by a number of economic development activities in the area. “I think it bodes well,” he said.
Bittinger said plans by Dartmouth to increase the size of the engineering school is one example of the college creating a critical mass geared toward what he calls “the new tech economy.”
Employers
The county’s employers represent a diversified economy. There’s King Arthur Flour, Okemo Mountain Resort, Vermont Castings, Newsbank, Harpoon Brewery and Black River Produce.
But the three largest employers in the Upper Valley are in health care and education: Dartmouth Hitchcock Medical Center, Dartmouth College in New Hampshire and the VA Medical Center in White River Junction.
Dartmouth-Hitchcock alone has 9,000 employees throughout its system in New Hampshire and Vermont, including 1,300 doctors, residents and fellows, and associate providers; 1,800 nurses; and 1,200 allied health professionals.
According to the hospital’s website, 75 percent of its workers live in New Hampshire with the remaining 25 percent living in Vermont.
Dartmouth College has 4,234 employees, including 952 faculty.
The VA hospital in White River has a staff of 1,216, which includes several satellite clinics around the state.
Dr Brett Rusch, the hospital’s acting director, said the hospital today is doing better than a couple of years ago when it was running a budget deficit.
As a result, Rusch said the hospital’s workforce is 5 percent less than it was 18 months ago. He said the reduction in staff was accomplished through normal attrition. He also said to increase efficiency steps were taken to reallocate certain jobs.
The hospital’s current budget of $219 million, is an 8 percent increase over the previous year. Of that $219 million, payroll accounts for $133 million.
“Certainly the budget climate within VA is dynamic,” Rusch said. “That’s going to be changing even more with some of the new legislation that’s been passed.”
He said some of those changes like purchased care in the community will have less impact on the White River Junction hospital than at other VA facilities.
Overall, Rusch said the hospital’s finances from a budget perspective are “in a very secure place.”
The hospital serves 26,000 veterans a year, including vets served by the seven outpatient clinics of which two are in New Hampshire.
The hospital has a major project in the works: a $9.9 million renovation of the 43-bed medical/surgical ward in the next year or two.
“We mostly have single and double rooms so when that’s done our bed capacity will be somewhere in the range of 32 to 37 (beds),” Rusch said.
The hospital also has a mental health unit with 12 beds and a residential rehab program with 14 beds.
He said the biggest challenge the hospital faces is managing sustainable growth while providing necessary services for veterans.
Another challenge faced by other employers is hiring. He said while the VA offers “pretty” competitive pay, doctors can make more money elsewhere.
The upside of that is that doctors who work at the hospital are given “the ability to spend the time that they need with their patients delivering good care and the salary is not connected to productivity.”
While education and health care are major drivers of the Windsor and Upper Valley economy, there is no shortage of companies that make things.
One of the county’s legacy manufacturers is GW Plastics. The 63-year-old Vermont company is on track for another solid year, said GW Plastics President and CEO Brenan Riehl.
“We’ve had nine record revenue years out of the last 10,” Riehl said. “We hope to have another record revenue year in 2018.”
The company specializes in injection molded thermoplastics and silicone parts and devices for the healthcare/medical, automotive, and consumer and industrial markets.
The bulk of the business, 75 percent, is in the medical device field with 25 percent automotive.
“Right now healthcare is growing faster than the automotive business,” Riehl said, adding that the company’s Bethel and Royalton operations are focused solely on the health care market.
With corporate headquarters and facilities in Bethel and Royalton, GW Plastics employs 450 people in Vermont.
The company also has locations in Arizona, Texas, Mexico, China and Ireland.
Springfield
Springfield, once the hub of the machine tool industry, continues to transform itself, diversifying its economic base that goes beyond traditional manufacturing.
Bob Flint, executive director of the Springfield Regional Development Corp, said there are several economic irons in the fire.
“I think this is one of these things, particularly with Springfield, where we’ll talk a year from now and some of the seeds that are beginning to be planted will have germinated and things are starting to be very interesting,” Flint said.
Those “seeds,” as Flint put it include the former Park Street School project, the Woolson Block project in the downtown, and the former J&L machine tool plant.
“There’s a lot of things in motion and we’ll be seeing the fruits of that in the coming weeks and months,” he said.
Springfield Regional Development Corp. (SRDC) has an option to purchase the 90,000-square-foot Park Street School. The idea is to turn the former school into co-workspace for entrepreneurs and startup businesses and “activities related to technology and connectivity,” Flint said. He said VTel’s incredibly high-speed internet gives the area a significant advantage over other communities across the country in attracting businesses that require a super-fast broadband connection.
There are other pieces of the project that are coming together that could involve other properties beyond the school, Flint said.
A major downtown project is the Woolson Block.
The Springfield Housing Authority and Housing Vermont have partnered on a more than $7 million project to breathe new life into the dormant Woolson Block.
Flint said the project, which is scheduled to break ground in the fall, includes affordable housing on the upper floors and four retail storefronts on the ground floor.
“From Springfield’s point of view, it’s been a building in rough shape for many, many years, it’s been empty the last few years,” he said. “The renovation of this building is really kind of really like the centerpiece of the downtown area.”
On Clinton Street, the former J&L machine tool plant is owned by the SRDC. Plant No. 1 is a 270,000-square-foot building which sits on a brownfield site. “We are methodically working our way through the process of hopefully getting to tear down much of that building, probably next spring,” Flint said.
Remediation work continues at the site. He said 990 tons of contaminated soil were removed last fall.
“Across the street we have VEDA (Vermont Economic Development Authority) financing of just over $600,000 where we’re doing renovation work on the former Bryant (Grinder) building,” Flint said.
He said once the work is completed there will be 35,000-square- feet available for occupancy.
Springfield also has the opportunity to take advantage of newly created federal opportunity zones that were included in last year’s tax bill. Flint said the tax credits could attract investors to develop some of the town’s more distressed properties like the Bryant Grinder property.
Beyond Springfield, Flint said other towns in the county are undertaking various projects, including downtown master planning.
“The town of West Windsor just got the village center status and they’re continuing to do activities related to the redevelopment of the former Ascutney Mountain Resort as a destination bike area,” he said.
In Windsor, Artisan’s Park with its variety of food and craft businesses continues to be a major tourist draw, attracting more than125,000 visitors a year, Flint said.
The park is home to several businesses: Harpoon Brewery, Vermont Farmstead Cheese Co., Blake Hill Preserves, Great River Outfitters, Artisan Eats, Silo Distillery, Simon Pearce and Path of Life Garden.
Flint also said he’s working with Windsor Improvement Corp. in hopes of redeveloping the former Goodyear property.
Downtown
The optimism expressed by Flint on Springfield’s future is shared by the head of the Springfield Regional Chamber of Commerce.
“I would say we’re seeing a turn in a good direction,” said Caitlin Christiana, the chamber’s executive director. “We’ve seen several small businesses popping up in the recent months which is encouraging.”
Christiana said one new business is the Copper Fox, a farm-to-table restaurant on Main Street. She said another new entry downtown is the soon-to-open Flying Crow Coffee Co. She said the owner of the coffee roasting company has future plans to open a 15-seat, micro-cafe.
Other recent downtown openings include:
Shannon's Upscale Resale, Alaura's New Nails, Clever Cow Designs, and Dark Mountain Games.
Christiana singled out the success of Trout River Brewery on River Street, which opened a tasting room.
“They’ve been having food trucks and live music on Saturdays, and it's a fantastic and fun addition to our community,” she said.
Like other downtowns, Christiana said it continues to be a challenging time for bricks and mortar retailers. Online shopping has hurt the retail industry nationwide but she said Springfield’s proximity to sales tax-free New Hampshire has always been a problem.
She said the chamber is working with its members on a collaborative effort to encourage consumers to support their local businesses and keep dollars local. “So we’re putting together a year-long collaborative effort where the businesses will sort of cross promote each other and share information and news so we kind of have more of a collective impact,” Christiana said.
She said direct communication is critical in building relationships. Christiana said the same point was made at a recent roundtable discussion hosted by Rep. Peter Welch.
“Human connections and person-to-person interactions are so critical to people’s sense of place and that sort of vibrancy of a community,” she said. “So when we approach it from that angle it seems much more achievable then it does when you kind of look at it the reverse way, like how do we improve the economy.”
Christiana said there are several projects in the pipeline including the Comtu Cascade Park project along the river front. She said the Main Street Steering Committee is fundraising for the $450,000 project, which is considered a critical piece for the redevelopment of the downtown.
Christiana said the idea is to create a walkable public green space with seating. She said the venue would include art as well as a place for live music.
White River Jct
There’s no lack of economic development in the area covered by the Green Mountain Economic Development Corp., including an expansion in Randolph by LEDdynamics, a commercial lighting company.
GMEDC Executive Director Bob Haynes said the company has outgrown its leased space in Randolph where it employs 65 workers. The new 27,600-square-foot facility will be built off Beanville Road on a piece of property acquired by GMEDC, Haynes said. He said GMEDC will lease the building to LED dynamics.
“Altogether it’s a $5 million project and the town of Randolph got a Community Development Block grant for $1 million,” he said.
VEDA, the Vermont Economic Development Authority, is also providing a $3.8 million loan with the remainder of the financing coming from the company, Haynes said.
The project is expected to break ground shortly. DEW Construction is the construction manager.
When completed, Haynes said the company projects it will add another 35 workers bringing total employment to 100.
Along Sykes Mountain Avenue two car dealerships are building new showrooms. Key Autogroup of Portsmouth, NH is opening a Chevrolet dealership to replace the former Miller dealership in Lebanon, NH, which closed last year, Haynes said.
He said the old Miller property is now a bus transportation hub operated by Dartmouth Coach.
The other dealership is Prime Subaru of Vermont which is relocating its dealership from Norwich to White River Junction.
“We now have a number of car dealerships all congregated on Sykes (Mountain) Avenue,” he said.
Bittinger, the real estate developer, has five tenants in a building along Railroad Row, all tech firms.
“I think that’s a critical piece of our economy for the kind of folks who want to live and work here,” he said.
Bittinger said he’s also encouraged by the emergence of the creative economy of artisans and artists in Pomfret, Barnard and Royalton.
GMEDC is also involved in helping a community group acquire and operate Will’s general store in Chelsea.
“The goal is to purchase it from Will Gilman and operate it as a community-based market with some social space,” Haynes said.
“It’s important to the community that there’s a place to buy daily groceries and luncheons, hot meals, maybe take-home meals,” he said.
Haynes said the only other grocery store in town, Flanders Market, closed (in late 2016).
Haynes said there are two other pending transactions which he is not at liberty to discuss.
One of the tasks of regional commissions, including Twin Rivers-Ottauquechee, is helping towns analyze and come up with a plan to clean up brownfield sites for redevelopment.
In Windsor County, the commission is involved in the cleanup of two sites in downtown White River Junction.
In Bethel, a cleanup there will allow for an expansion of a hardware store. The commission was also involved in the cleanup of the Jones & Lamson property in Springfield.
Geiger, one of the commission’s senior planners, said EPA funds are available to undertake an assessment of brownfield sites that otherwise would be paid for by the developer.
He said, however, the actually cost of the cleanup would be the responsibility of the developer.
Real estate
Home sales in the county are on a par with last year with 86 homes sold through June compared to 89 for the same period last year, according to the Vermont Association of Realtors.
The median sales price through the first six months was $197,500 compared to $215,000 for the comparable period in 2017.
Inventory is down to seven months from 10 months a year earlier. There are 619 active listings through June compared to 820 for the same period year ago.
Of the 34,910 housing units in Windsor County, 70.8 percent are owner-occupied, according to the U.S. Census Bureau.
Ken Wells, chief retail lending officer at Mascoma Bank, said home mortgage lending remains healthy and on par with last year
“I’d say if there was more inventory we’d be ahead of last year at this time,” Wells said.
Anecdotally, he said the inventory appears just as tight on the New Hampshire side of the border.
“I think it’s particularly acute in Lebanon and Hanover,” he said.
So far, the slow uptick in interest rates has not had any noticeable effect on lending with mortgage rates remaining historically low.
“We don’t get the sense people are being priced out of the market because of interest rates,” he said. “It’s more lack of inventory, which is driving price appreciation faster than otherwise would be.”
Wells said based on his experience it’s easier to obtain a mortgage today than it was 25 years ago.
On the commercial real estate side, the market is holding steady and looks to be improving, according to Kenneth Howe, senior vice president and chief commercial banking officer at Mascoma.
“There are a number of new construction projects or expansions recently completed or currently underway in the Upper Valley,”Howe said in an email responding to questions.
“These significant levels of investment obviously indicate continued confidence in certain sectors of our market. In addition to new construction activities, we have also seen a number of sales of existing businesses which may, or may not, have included real estate.”
The health of the commercial real estate market is reflected in the bank’s lending with 13 percent growth in the lending portfolio last year compared to 2016.
Howe said growth remains strong through the first six months of this year.
New Hampshire is often seen as a more business friendly state. But in terms of commercial lending he said there isn’t any meaningful difference between Vermont and New Hampshire.
And while the Fed has raised interest rates, Howe said the bank has not seen any indication that rising rates have caused a slowdown in commercial lending in our markets.
Bruce Edwards is a freelance writer from southern Vermont.