Windham County Economic Report: Businesses face short-term and long-term risks

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Windham County Economic Report: Businesses face short-term and long-term risks

Mon, 05/25/2020 - 12:59pm -- tim

Sonnax makes a variety of parts for the aftermarket automotive industry. The company employs 161 at its Bellows Falls plant. Courtesy photo.

by Bruce Edwards, Vermont Business Magazine “Terrible.” With that one word, Adam Grinold summed up in mid-April the immediate fallout on businesses in Windham County from the Covid-19 pandemic. 

What’s more troubling is the near-term and  long-term outlook which could take an even greater toll on businesses across a wide swath of the economy, said Grinold, the executive director of the Brattleboro Development Credit Corp. and current president of the state’s regional development corporations.

In Windham County, he said employers and business owners are a close-knit group who remain hopeful and resilient.

Grinold said the pandemic has forced some businesses to go into “hibernation.”

But more ominously other businesses have given up basically saying, “We’re not going to make it through this and we’re going to close our doors.” 

“Of course the hardest hit sectors were restaurants, retail, those are probably our most vulnerable,” he said.

Early on Brattleboro Development Credit Corp created the Covid-19 Business Resiliency Program to keep businesses informed with accurate, current and actionable information.

Photo: The Downtown Brattleboro Alliance held an online gift card challenge that pulled in more than $57,000 to help downtown shops and restaurants. Courtesy photo.

It includes a BDCC analysis based on the Brookings Institute model of risk assessment by sector and business size.

“The data is scary,” said Grinold, who presented the findings to the House Commerce Committee on April 16.

As of the first quarter of 2018, there are 1,835 private businesses in the county employing 19,527 people. The overwhelming majority – 1,135 – have four employees or less. 

The BDCC analysis showed that 24 percent of those businesses fall into the category of immediate risk, 34 percent are considered at near term risk and 42 percent at  long-term risk.

Near term at-risk businesses include administrative and support services, wholesalers of nondurable goods, specialty trade contractors, building construction and real estate among others.

Companies at long term risk include professional and technical services, educational services, ambulatory health care services, machine manufacturing, hospitals, food and beverage stores and food manufacturing.

To what degree the data plays out remains uncertain. However, Grinold said the data does give economic development officials and policy makers “an understanding this will be in waves” and “there will be near term and  long-term impacts as well.”

The Brattleboro labor market, the county’s largest, recorded a March unemployment rate of 3 percent, up from 2.4 percent in February, according to the state Department of Labor. Statewide the March unemployment rate was 3.2 percent, an increase from 2.4 percent the previous month. Like the rest of the state, the April figures are anticipated to spike higher with many Vermonters filing for unemployment.

Windham County has a population of 42,222 with a median household income of $52,659 (2018), according to the US Census Bureau. The state median household income is $60,076.


The fallout from the pandemic is painfully evident to Senator Becca Balint and Representative Laura Sibilia.

Balint said the first few weeks of the stay-at-home order had been brutal for businesses so Governor Scott’s announcement in mid-April that the state would slowly start to reopen for business was welcome news.

“People are eager to get back to work even if it’s just a few people at a time,” said Balint, the Senate Majority Leader. “I think it signals to everyone that there are better days ahead.”

Balint praised the Scott administration for its handling of the crisis “doing an excellent job through this emergency.”

The one area that urgently needed addressing was the bottleneck in processing the unprecedented volume of unemployment claims which Scott promised would be resolved by April 19.

“I’m hearing not just from employees, I’m hearing from these small business owners who are desperate to get help to their employees that they’ve laid off,” Balint said.

Sibilia, who represents Windham-Bennington, said southern Vermont struggled economically before the pandemic hit the state.

She said there was Tropical Storm Irene followed by the closure of Vermont Yankee. And like the rest of the state she said southern Vermont also felt the demographic changes of an aging workforce and exodus of young people leaving the state. 

Sibilia, whose expertise includes strategic planning with the BDCC, said the resort and hospitality industries have been hit hard from the pandemic’s economic fallout.

As a resident of Dover, Sibilia said Mount Snow, a major employer, was forced to shut down before the ski season was over.

The fallout then spilled over to restaurants, bars and other small businesses.

Sibilia, who spent 20 years as a waitress and as the former director of the Mount Snow Valley Chamber of Commerce, knows the area well.

“I’m keenly aware of what the economy has felt like here and it’s felt like a long kind of slow decline,” she said.

She said the closure of The Hermitage Club, a private ski resort, dashed the hopes of many. 

Right now, Sibilia said business owners and independent contractors are at the point of trying to figure out how to remain in business and “keep the future intact.”

“I think most people are scrambling,” Sibilia said. “I have encountered mostly patient folks in all of this.”

She said emergency state and federal legislation has helped but more needs to be done. 

At the local level, Sibilia said Dover, which has a 1 percent option tax, is providing some emergency funding for businesses.

In Wilmington, she said the town is doing something similar with a revolving loan fund. 


Vermont businesses have taken advantage of federal emergency relief as part of the Covid-19 stimulus bill including the $349 billion Paycheck Protection Program.

The program provides forgivable loans that allows businesses to keep paying employees.

By the time the initial round of PPP funding ran out, Vermont ranked third in the country in per capita funding.

Grinold said a number of businesses in the county received funding. 

Vermont’s congressional delegation was credited by Grinold for their help in keeping the state up to date on the federal assistance programs which allowed businesses to tap into the funding early on.

“That level of dedication and communication to getting that information to Vermonters and Vermont businesses I suspect is unparalleled in the nation,” Grinold said, “and is probably what helped us achieve such high per capita PPP funding.”

What’s needed at this point, Grinold said, is early access to capital. “The hardest hit businesses are the smallest ones,” he said. “They have the least liquidity and the hardest time accessing new capital.”

As an example, he said for a business with only two employees the PPP doesn’t do a lot. 

“We need to get dollars into the hands of businesses that can absorb increased debt,” he said.

Following Tropical Storm Irene, the Vermont Economic Development Corp. was that funding vehicle, Grinold said.

Unfortunately, he said VEDA does not have an emergency loan program at the present time.

To fill the void, he said the regional development corporations and the state are trying to coordinate a revolving loan fund program.

He said that would create greater awareness and access “to millions of dollars that are scattered across all these different revolving loan fund programs.”

At BDCC, there is the USDA-backed $400,000 Rural Micro-entrepreneurial Assistance Program. The program lends money to businesses at 7 percent interest. But because of the current crisis BDCC was able to persuade the USDA to lower the interest rate to 3 percent for businesses in need, Grinold said.

Although not interest-free or forgivable, he said BDCC is able to provide excellent terms and disburse the money quickly. The maximum loan is $50,000.

Grinold also said BDCC is pursuing other revenue sources to provide zero interest loans in the coming months.

Balint, who serves on the Senate Economic Development Committee, said an area of concern remains the Paycheck Protection Program which ran out of money in mid-April.

While Congress revived the program, she said, in the meantime employers who didn’t receive funding in the first round are worried about paying their employees.

“You can only say to people stay patient for so long,” Balint said.

According to the Vermont Bankers Association, as of April 16, there were 6,983 businesses in the state approved for PPP loans totaling $1 billion.

Balint said per capita Vermont ranked third in the nation for PPP funds.

“So our banks have been on it getting money out the door to these businesses and have been very efficient in getting these claims processed,” she said. 

She said what’s lacking throughout the emergency is the lack of real time information on the state level for businesses to make decisions.

She said even if the news is bad, her constituents want information in a more timely manner.

She said it’s is an opportunity for the Agency of Commerce and Community Development to improve its online platform so businesses can access information in real time as the economy reopens in phases.

Balint said some information can be found at the Department of Labor, at the Agency of Commerce and at the Secretary of State’s Office. 

“It’s not a criticism,” she said. “It’s just this emergency and the scale of it is showing us where the holes are in getting information out to people,” she said.

Balint said she expects the Senate Economic Development Committee to make recommendations to the administration to improve the dissemination of information.

Bank’s role

Brattleboro Savings & Loan has been at the forefront of processing PPP loans 

By mid-April, the bank had processed $10 million in PPP loan applications.

“The PPP loan program essentially says you can borrow up to 2.5 times your average monthly payroll,” said bank President Dan Yates.

Yates said 75 percent must be used to keep workers on the payroll or to bring back workers who have been furloughed. Businesses can use up to 25 percent to pay supporting expenses - lease and mortgage payments, utilities etc.

“If you do those things … that whole loan can be forgiven,” he said. “It becomes a grant.”

Along with other banks, Brattleboro Savings & Loan has largely limited customer transactions to drive-up windows, ATMs, online and with mobile banking apps. 

For customers who need to access their safety deposit box or close on a mortgage, he said the bank will see customers in the lobby by appointment.

Yates said the majority of employees who can work from home do so.

For customers who may have trouble paying their bills, Yates urge them to call.

“Don’t be afraid to call us, don’t be ashamed to call us,” he said. “This is uncharted territory for everybody.”

Yates said the bank is working with borrowers to reduce their payments or defer payments so both retail and business customers “can get through this and how can we help.”

In 2019, Yates said the bank reported its second most profitable year.

Yates attributed a successful 2019 to the strong economy, a continued low interest rate environment, and a staff that is extremely dedicated and efficient.

Mortgage lending remained strong last year. The problem Yates said is a lack of inventory. 

He also said the second home market was very strong in 2019. “We do quite a bit of mortgage lending over in the Deerfield Valley, Mount Snow.”

Brattleboro Savings & Loan was the first bank in Vermont and the second in New England to be certified a B Corp and ninth in the country.


Before the pandemic struck, there was a vibrancy to downtown Brattleboro that featured a number of new businesses, said Stephanie Bonin, executive director of the Downtown Brattleboro Alliance.

“We had a really low rate of vacancy and some really exciting new stores that had just come in,” said Bonin, ticking off a list that included Dosa Kitchen, a South Indian restaurant and Michelle Frehsee Photography.

Bonin said the immediate focus of the Alliance is to allow businesses “to hibernate until we’re able to reopen as a community.”

She says businesses need cash in hand in order to survive and reopen.

“So the days are ticking and the weeks are ticking without any financial support,” she said.

Bonin said it makes perfect sense that non-essential businesses should remain closed for the safety of the community.

“I wholeheartedly support that,” she said.

But she said there is a cost associated with the state's mandate to close and those costs continue to pile up even when the doors are closed.

“How can we make sure our town hibernates as efficiently and as smartly as possible so that we can reopen and not rebuild,” Bonin said.

To that end, she said the Alliance has been coaching businesses on reducing or freezing operating costs such as rent, insurance, utilities, operating fees etc.

Bonin also the Alliance has also been an information source on PPP and unemployment compensation for the self-employed.

“If a business owner is getting unemployment down the road, then any savings they have can go to invoices due or payroll,” she said.

Although a small percentage of normal sales, Bonin noted that a lot of the downtown restaurants have switched to takeout.

The Alliance completed a successful online gift card challenge to get cash into the hands of downtown business owners.

There was a $5,000 match provided by an anonymous donor. “So for every gift card purchased a matching gift card was purchased by the private donor and that gift card was given to a family in need,” Bonin said.

The gift card challenge had a ripple effect, attracting several other donors for a total of $13,000 in matching funds.

She said the gift card challenge put $57,503 in the hands of downtown member businesses.


Like other hospitals, Brattleboro Memorial Hospital is at the front lines of the Covid-19 crisis. The hospital has taken several steps in response, including the furlough of 65 non-essential workers or about 10 percent of its 600-person staff.

“These are unprecedented times for our health care system which require unprecedented responses and, unfortunately, these furloughs are one of many actions we must take,” BMH President and CEO Steve Gordon said in a statement posted on the hospital’s website in early April. “In my 10 years as CEO at BMH, we have never had a workforce reduction of this magnitude and it is my personal goal to bring back all staff after this pandemic subsidies.” 

The hospital has also consolidated its six primary care practices into three practices.

Photo: The Covid-19 pandemic has forced Brattleboro Memorial Hospital to furlough 10 percent of its staff who were considered non-essential workers. The hospital has 600 employees. Courtesy photo.

To prepare for the potential surge of Covid19 patients, the state’s 14 hospitals have temporarily reduced services including elective surgery, outpatient radiology and lab work.

The fallout from the pandemic has taken a financial toll with BMH’s revenues plummeting 80 percent. 

BMH fiscal 2020 budget is $88 million.

As of April 19, the hospital had conducted 443 coronavirus tests with 33 coming back positive, BMH reported on its website. One patient remained hospitalized, three have been discharged. The hospital reported no deaths due to Covid-19. 


Three of the county’s manufacturers are adjusting to the new economic realities.

Fulflex, a Brattleboro maker of elastic used in a variety of products, is a critical supplier of material used in the manufacture of face masks.

Photo: Fulflex makes elastic that goes into a variety of products including underwear, sportswear,  disposable diapers and healthcare products. The Brattleboro plant  has experienced an increase in orders for elastic used in medical-grade face masks. Courtesy photo.

“We cannot keep up with orders currently,” said Patrick Curtin, director of product marketing and technology. 

Fulflex, which has been in the mask elastic business for several decades, experiences spikes in demand for its mask elastic during natural disasters, epidemics and pandemics, like SARS and H1N1. In the case of pandemics, the plant will ramp up two or three times its normal production.

“This current crisis is even larger than that because it is about the largest event impacting more countries simultaneously than anything we’ve seen in the past,” Curtin said. “So our plant in Vermont and our plants in India are basically running at full capacity to push out mask elastic and elastic for disposable medical garments.”

He said demand could well be sustained into next year.

The plant makes most of its mask elastic for the N95 mask used by health care workers on the front lines of the crisis.

The Brattleboro plant has 110 employees and is looking to hire additional workers.

To meet demand, Curtin said the plant has shifted production to mask elastic from other areas.

He said that hasn’t been a problem because there has been a decline in elastic used in underwear and swimsuits.

At Sonnax in Bellows Falls, the company in early March implemented new procedures to deal with the pandemic.

“In a lot of ways we were changing policy every two or three days it seemed like through social distancing and suspending business travel,” said Sonnax CEO Steve Boyer. “So we made a lot of changes throughout the whole time and try to adjust with the primary goal of keeping all of our employees safe and keeping them all healthy and making sure they feel comfortable coming in every day.”

Sonnax, a manufacturer of aftermarket parts for the automotive industry, has seen its business slow down since the onset of the pandemic.

Photo: Sonnax makes a variety of parts for the aftermarket automotive industry. The company employs 161 at its Bellows Falls plant. Courtesy photo.

Boyer said the social distancing in the plant with 161 workers has slowed production down resulting in a less efficient operation.

But he also said the company has figured out ways to make social distancing work.

“Obviously if you need to train anybody that’s a whole lot different and we figured out ways to make that work keeping people six feet apart,” he said. 

He said it’s definitely been a challenge both on the manufacturing side and on the warehouse and distribution side. But overall Boyer said the adjustments have “worked pretty well.”

With fewer orders, he also said the plant doesn’t have to be quite as efficient.

Boyer said so far Sonnax has not furloughed any employees.

Like Fulflex, Chroma Technology Corp, is doing its part supplying critical products during the pandemic.

A maker of components for the photonics industry, Chroma’s optical filters are used in microscopes.

“The test equipment that is used to test for Covid-19 is called a preliminary chain reaction, PCR machine,” said Paul Millman, co-founder of the Bellows Falls company. “The testing is done by looking at a florescent signal and you can’t see a florescent signal without filters.” 

Photo: Chroma Technology laboratory. Courtesy photo.

He said the company makes the filters and a large percentage of the machines.

“So Chroma is incredibly busy at this moment,” said Millman, who retired at the end of April.

He estimated sales for the fiscal year that ended April 30 will be over 10 percent compared to the previous year.

To ensure the safety of the workplace environment, some employees are working from home. Others on the floor of the plant work at least six feet apart. 

While microscope companies represent 12 percent of sales, Millman said a large percentage of business is in biomedical and biotechnology research and clinical machines.

“So the big stuff going on right now is all clinical,” he said. 

Despite a starting pay of $40,000 a year, Millman said the company struggles to find workers.

“It’s difficult now and it’s going to be increasingly difficult in the future,” he said.

Chroma is a 100-percent employee-owned company. 

Millman was succeeded by Chief Financial Officer Newell Lessell. Chief Technology Officer Janette Bombardier assumed the dual role of chief financial officer.

In addition to filters and light sources, the company also provides application engineering services for the scientific, research, technical community as well as original equipment manufacturers for life sciences, medical diagnostics, pharmaceutical research, machine vision, and astronomy.


With many more people working from home during the crisis, the importance of a robust broadband network has gained added urgency.

The Windham Regional Commission is three months into a six month project collaborating with ValleyNet and Rural Innovations Strategies to improve broadband coverage, said Chris Campany, the commission’s executive director.

The commission was awarded a grant to develop a feasibility study and then a business plan.

“The idea is to develop a CUD (communications union district) business plan to extend fiber to the home (or business) of the unserved and underserved,” Campany said.

He said the initiative is not designed to compete with Comcast or other commercial internet service providers. 

“So this is modeled after a very successful model in Central Vermont (ECFiber) … and it’s the model that’s going to be followed in the Northeast Kingdom,” he said. “It seems to be a model that works in Vermont.”

Five years ago the state enacted a law allowing towns to create communications union districts.

A year later, ECFiber became the state’s first CUD providing high-speed internet service to 24 member towns in central Vermont.

The delay in moving forward with a CUD in Windham County is the current stay-at-home order. Campany said this type of public discussion would likely be best served by face-to-face public meetings as opposed to conducting hearings via Skype or Zoom.

Sibilia, who represents Windham-Bennington, is a staunch supporter of grassroots efforts aimed at establishing communications union districts.

The current crisis points to the urgent need to upgrade connectivity with fiber in the towns she represents and beyond. She said high-speed broadband is critical for remote learning and working at home.

“We’re certainly very keenly aware of the challenges to our telecommunications infrastructure here,” said Sibilia, vice chair of the Joint Information Technology Oversight Committee. “I’d like to see if there is additional technical assistance to help these volunteers.”

If Congress passes an infrastructure bill with funding for rural telecommunications districts, Sibilia said she wants “to make sure we don’t miss the boat, that we have those plans in place.”

Because of the current stay-at home order, there has been a change in the state’s Open Meeting Law so people are not put at risk by requiring them to be at a physical location for meetings held by select boards and other warned public meetings.

“We don’t want to push towns into doing anything that they feel would be counterproductive,” Campany said.

“The House and Senate legislation they voted on included the suspension of that physical meeting requirement,” Campany said.

Instead, meetings can be held via Skype or Zoom.

“In some respects this may be easier for people to participate in than face-to-face meetings,” he said. 

The other change is that because of the crisis towns may have to miss certain deadlines, including updating town plans.

Campany said holding those meetings online is “not the most robust way to gauge” the public’s reaction.

Working with the Vermont League of Cities and Towns and state lawmakers, municipal deadlines were extended for 90 days beyond the state of emergency.

Bruce Edwards is a freelance writer from Windham County. This story first appeared in the May issue of Vermont Business Magazine.