The $31 million Putnam Block project in downtown Bennington is nearing completion. The renovations of three buildings, including the former Hotel Putnam, will create 31 apartments and several commercial and retail spaces. Courtesy photo.
by Bruce Edwards, Vermont Business Magazine If you want to get a sense of the Bennington County economy during COVID-19, a good place to start is with Bill Colvin, assistant director with the Bennington County Regional Commission.
“It’s a little uncertain as to be expected,” he said. “I think like everywhere the hospitality sector and restaurants have taken a big hit.”
Colvin said pre-pandemic the biggest challenge was the workforce shortage.
That’s been eclipsed by the pandemic and a soaring unemployment rate as companies furloughed or laid off workers.
Vermont’s unemployment rate plunged in August to 4.8 percent from 8.3 percent in July, according to the state Department of Labor.
The Bennington and Manchester labor markets also saw their jobless rates plunge. Bennington recorded an unemployment rate of 5.3 percent in August compared to 9.1 percent in July. Manchester’s unemployment rate fell to 5.5 percent from 10.2 percent in July.
Although those numbers appear encouraging, Labor Commissioner Michael Harrington added a word of caution to the monthly report:
“Knowing that the actual number of Vermonters filing weekly for unemployment benefits remains much higher than the survey data, and that traditional work search requirements have been suspended, we know that the results of the household survey do not accurately reflect Vermont's economic reality. What is clear, is that the traditional definitions used to calculate unemployment rates or categorize displaced workers under normal circumstances, do not align with the crisis environment we’re in today.”
Bennington County has a population of 35,470 and a median household income of $53,040 compared to a statewide median of $60,076 (2018).
The southern two counties of Bennington and Windham received a boost earlier this year when the Economic Development Administration approved the first ever Comprehensive Economic Development Strategy for southern Vermont.
Colvin said given the pandemic’s impact the group is tweaking its strategic planning to address short term and long term economic goals.
The first phase of the $31 million Putnam Block project in downtown Bennington is nearing completion.
The revitalization project includes 31 apartments and commercial and retail space spread along a block of three buildings, including the former Hotel Putnam, Winslow building and Pennysaver building.
Apartments rent between $800 and $2,000 a month.
Colvin said he anticipates residents will begin moving into the one, two-bedroom and efficiency apartments starting in January at the latest.
He said there is a waiting list for the low-income/ workforce and market rate units.
Colvin said there are seven retail/office spaces available. Bennington College will occupy the second floor of the Winslow building for its development office along with housing for graduate students.
One retail space will be occupied by a bookstore. Other likely tenants include a cafe, a large restaurant, pet business, and real estate office, he said.
“We’re also trying to find a grocery tenant but that’s been a lift at this point,” he said.
The $31 million project was financed through a combination of 21 funding sources, including New Market Tax Credits, along with 60 private investors, Colvin said.
He said the group of community investors has “pressed pause” on planning for Phase II which has been impacted by the pandemic.
“The anchor tenant there was to be Southwestern Vermont Health Care and we expect they still will be,” Colvin said, “but they had to press pause just given the uncertainty of their budgets and everything.”
He said Phase II will be a single building, four or five stories (adjacent to Old Castle Theatre) and built on the grounds of a former hardware store.
”We expect given the demand probably five stories, 30 more residential units,” he said.
Colvin said the building would be anchored by Southwestern Vermont Health Care and its partners.
Depending on the market, the intent is to have several small retail establishments as well, he said.
The price tag on Phase II hasn’t been firmed up but Colvin said it would likely be $20 million to $25 million.
As CEO of TPW Real Estate in Manchester, Paul Carroccio has a pretty good handle on the county’s real estate market.
“The residential market is up, inventory is selling at a much faster pace than last year and … new inventory is coming in at higher prices,” he said.
In towns where there is school choice, Carroccio said prices are higher and homes are selling faster “than the other towns that don’t have school choice.” As a result, he said there has been a spike in out-of-state buyers. “So that’s definitely a driver,” he said.
Overall the market is doing well.
“Even Bennington Town, Shaftsbury, a lot of residential sales are happening there in the higher price points,” Carroccio said.
Like other areas of the state, he said the county is lacking in starter homes and good rental properties and single-level living for older Vermonters.
TPW is managing rentals at the Putnam Block.
“We just have an amazing amount of demand for those two and one bedroom units at market rate,” he said.
The demand runs counter to the belief that market rate apartments aren’t attractive. Carroccio said one reason for the demand is the lack of inventory of starter homes.
He said there is a list of 90 people interested in renting one of the 31 apartments.
Carroccio said there is good commercial activity as well.
“A lot of out of town commercial purchases, investments, a lot of cash purchases, no financing,” he said.
That’s the opposite of what he expected.
“I would have thought commercial would have tanked during COVID but it didn’t,” he said.
He said his best guess is that investors had “a lot of money on the sidelines” and at the same time aren’t too sure about the stock market.
Add to that, “Vermont is a safe place during COVID is a clear attraction to these folks that are in areas that are not safe,” he said.
On the residential side, Carroccio said someone who moves to Vermont will also move their business or look to buy a business. “We’ve seen a lot of that activity going on,” he said.
While there are pockets of manufacturing in the southern four counties, Carroccio said it’s tourism that drives much of the economy, including the second homeowner. “Unfortunately, our state doesn’t see it that way from a reporting perspective,” he said. “But the reality is such that if we didn’t have so many second home transactions we wouldn’t need so many lawyers, plumbers or electricians.”
For the state that means a hefty chunk of revenue from the sales tax, rooms and meals tax and property transfer tax, he said.
“There’s a lot of good going on in southern Vermont, a lot of good,” said Carroccio, president of the Manchester Business Association who also sits on the board of the Bennington County Industrial Corp. “A lot of transactional volume, a lot of purchases, a lot of deliveries to people’s homes, a lot of new business and then bolstered by the efforts of local community people doing things like the Putnam Block and the Brooks House in Brattleboro.”
What concerns Carroccio is whether the powers that be at the state level recognize “that we’re a tourism economy down here and it needs to be supported and backed up by the state and the folks that live in Vermont.”
A major focus of the Bennington Regional Commission during the pandemic has been business engagement with over 400 businesses “trying to assist them in various ways,” Colvin said.
He said that engagement falls into three categories: understanding the governor’s executive orders regarding the shutdown; new unemployment regulations and its impact on business and helping businesses access state and federal financial assistance.
Colvin said a bright spot in the economy is manufacturing.
“We still have a number of manufacturers that are looking to hire, so that’s good news,” said Colvin, who also serves as the commission’s community development program coordinator.
Kaman Composites is one of those bright spots. The company was named by Lockheed Martin/Sikorsky as one of their elite suppliers, Colvin said. “It’s a big deal,” he said. “There’s thousands of suppliers and a handful of them in the elite category suggesting good future business from Sikorsky.”
There was even better news when Kaman was recently awarded a $180 million, 10-year contract from an OEM manufacturer who we know but can’t be named publicly related to airplane engines, Colvin said.
Kaman makes composite parts for the defense, aerospace medical and commercial markets.
It wasn’t all good news on the manufacturing front. Energizer announced last year it would shutter its Bennington plant that employed in the neighborhood of 100 workers.
Colvin said he’s working with the state on a planning grant to identify future uses for the property. He said back its day the plant employed upwards of 700 people.
On the verge of its 100th anniversary party on March 17, Mack Molding like other businesses was forced to focus instead on COVID-19 and its consequences.
As a company engaged in an essential business, the Arlington injection plastic molding and contract manufacturer never shut down. In fact, Mack President Jeff Somple said it’s been a “remarkable” and successful year financially.
“We make a lot of products that are deemed essential,” Somple said. “We make things like ventilators, respirators, test equipment that’s used in laboratories, pharmaceutical filters that are used in pharmaceutical manufacturing, batteries that are used as backup power supplies and then a product that purifies the air.”
With all the furor over the US Postal Service, Somple said Mack also makes components for one of the largest mailing companies in the world.
He said the company quickly put in place safety measures for its employees, including staggering shifts in order to maintain social distancing.
Photo: Employees work on Mack Molding’s orthopedics line. To meet the needs of the company's essential customers, such as those in the medical field, social distancing measures have been put in place, including separating employees by at least six feet, installing barriers between work stations and requiring face masks. Courtesy photo.
Mack has two divisions. A northern division with five locations, including Arlington, East Arlington and Cavendish and a southern division with locations in North and South Carolina. The company also has a plant in Mexico.
Somple said unlike the northern division, Mack’s plants in the Carolinas lost business. He said those plants make parts for the heavy truck market which experienced a steep drop in sales.
Together Mack Group has 2,500 employees, with 670 in Vermont. Mack Tech, based in Gardner, MA, has 1,200 employees.
Somple said between the company’s customers and employees he feels “blessed.”
To show the company’s appreciation, every Wednesday Mack caters a free lunch for employees at its plants, which Somple said also helps support local restaurants and sandwich places.
In another gesture, he said employees might find a lottery ticket stuck on the windshield of their car.
Not far from Mack Molding, another plastic injection molding company, Quadra-Tek, manufactures high tolerance plastic components for the medical and aerospace industries.
The company employs 40 workers at its 18,000-square-foot plant in Arlington.
There is no shortage of work at Quadra-Tek but the pandemic has slowed production, according to owner John Haugsrud.
The plant operates three days a week instead of the usual five days.
“It definitely doesn’t help,” Haugsrud said. “We’re definitely behind on fulfilling orders. “Luckily, we have some very good customers. They understand what’s going on.”
As a consequence of COVID-19, the plant is shut down Tuesday and Thursday for cleaning, though Haugsrud said the company is considering going back to a five-day work week.
Looking ahead, he said orders are coming in at a steady pace.
He said the company also continues to see a good volume of customer inquiries for new work.
After working at Mack Molding, Haugsrud’s father and a friend started what is now Quadra-Tek (Arlington Industries) in 1968.
Quadra-Tek President Brenda Holton, who started with the company as a secretary 50 years ago while still in high school recently retired.
Jason Underhill is the new president and Kate Sheldon is vice president.
The Dorset company wasted no time in switching over its production from kitchen ware to making personal protective equipment.
“We actually had this very, very comprehensive plan in place that we followed almost to the letter and ultimately we retooled our factory and converted our manufacturing to PPE,” said JK Adams CEO Daniel Isaac. “We started making full face shields which we then became one of the major suppliers in New England of PPE, to the state, to the University of Vermont Medical Center, to New York City.”
Isaac said it was a way for the Dorset company to do its part during the pandemic and at the same time get people back to work.
When JK Adams restarted manufacturing of its traditional products, the company reached out to its wholesale customers to determine their financial status.
Photo: A worker at JK Adams works on a line making full face shields at the company’s plant in Dorset. Early in the pandemic the company retooled and started making face shields for the medical profession. Courtesy photo.
“We were fortunate not many of our large customers had financial problems,” he said.
JK Adams’ wooden cutting boards and other kitchen utensils and accessories can be found in bricks and mortar stores. But during the pandemic as people stayed home Isaac said internet sales simply exploded.
“So not only for our wholesale customers, who were selling online, but our own direct-to-consumer web business it just exploded as well,” he said.
During the pandemic, more people were cooking and baking at home and not going out to eat, which helped spur sales, Isaac said.
He said the company forecast early on during the pandemic the demand for certain products.
As a result, he said the company started selling flour and butter “from Vermont companies.”
“We were selling 25, 30 pounds of butter to one customer,” Isaac said.
Cutting boards, pastry boards and rolling pins are hot commodities as well, he said.
He said the company put on a second shift and is ready to put on a third shift if needed to keep up with orders.
The company’s payroll is up to 35 employees.
Isaac said the company continues to make full face shields including a shield for children.
At the front lines of the COVID-19 crisis are the state’s hospitals. They’ve also taken a financial hit as a result.
Southwestern Vermont Healthcare President and CEO Thomas Dee said the hospital experienced $17 million in lost revenue but that was offset through federal aid and belt tightening.
Like other hospitals, the Bennington hospital was forced to suspend elective surgeries for a time and furlough workers. Dees said 170 to 175 employees were furloughed. All employees have since returned to their jobs, he said.
Southwestern Vermont Health Care has 1,400 employees or 800 full-time equivalents.
Dees said the hospital is back at pre-COVID levels, which includes offering elective surgeries.
“We didn’t think we’d be back to our pre-COVID volume levels until October but we kind of got back to that level at the end of June and early July,” he said. “It’s been stronger than we originally considered.”
Southwestern Vermont Health Care has a current budget of $210 million with the bulk of that, $175 million, attributed to the hospital.
Whether there’s a deficit at the end of the fiscal year on Sept. 30 remains a question. Dees said the final number will depend on how much anticipated state and federal aid is forthcoming.
As part of its belt tightening, the hospital froze capital spending for a time.
Although the freeze was lifted in September, Dees said capital expenditures continue to be reviewed.
One project that is going forward and is now under review by the Green Mountain Care Board is a $25 million emergency room upgrade.
The hospital’s fiscal 2021 budget is also up for approval by the GMCB.
Pre-pandemic, hospitals across the state were facing financial challenges. In the case of Southwestern Vermont Health Care, the hospital has reaped significant benefits from its partnership with Dartmouth-Hitchcock Medical Center.
The partnership helps the hospital defray costs by taking advantage of programs and services offered by Dartmouth, including telemedicine.
“Telemedicine has been a Godsend for us, especially during COVID-19,” Dees said.
The good news during the height of the pandemic is there was no surge in patients, though the hospital was prepared for the worst.
“I think our high mark was five in-patients at one time and certainly we were prepared for a much larger number,” he said.
The hospital added negative pressure rooms for COVID patients and a respiratory evaluation center. Dees also said the hospital cross-trained staff and embarked on a community-wide program to educate county residents about the virus.
“We’ve been satisfied with our efforts but we’re not letting our guard down and we’re going to stay prepared,” he said.
Dees had nothing but the highest praise for the community, which raised $500,000 to defray the hospital’s expenses.
“We had small businesses, big businesses and individuals from all over the region supporting us,” he said. “People donating food to the hospital to feed our staff.”
A couple of years ago a fire that destroyed The Vermont Country Store Warehouse in Clarendon tested the company as it was forced to adapt in an emergency.
Fast forward to 2020, the year of COVID, and the mail order company was prepared to deal with the challenges brought about by the pandemic.
When Governor Scott issued his emergency order in March, Vermont Country Store closed its two retail stores and restaurants, quickly put safety protocols in place at its Manchester headquarters and Clarendon distribution center, and purchased 70 laptop computers so employees could work at home.
The company also sharpened its focus on its bread and butter - the direct-to-consumer side of the business, said Eliot Orton, co-owner of the family run business that was started by his grandparents Vrest and Ellen Orton in 1946.
“We really jumped in quick to make a lot of changes ahead of the state and ahead of state mandates and our first goal was really employee safety,” Orton said.
Photo: The Vermont Country Store has implemented safety protocols for employees and customers at its stores, including masks, social distancing and capacity limits. Courtesy photo.
He said workers at its retail stores in Weston and Rockingham were given jobs in support of the direct-to-consumer business through its catalog and website.
Because the direct-to-consumer business was deemed essential, providing products to consumers across the country, Orton said demand for its products and many hard to find items took off.
“We’ve sold truckloads of canned goods,” he said. “We had a huge run on cleaning products when all the grocery stores ran out. We sold 700 Easter hams early spring when we normally wouldn’t have sold those.”
Orton said there has been renewed interest in old fashioned board games with sales “through the roof.”
Kitchen and baking utensils are hot items as well, he said.
“Many of our customers just take comfort in many of the items we provide for them,” Orton said. “They’re not luxurious, they’re not high end.”
When the stores reopened, Orton said safety procedures were in place including masks and barriers in front of the registers. Orton said the company hired former police officers as a precaution in case any customers objected to the safety protocols.
Photo: The Vermont Country Store has seen a surge in its online business since the pandemic began in March. At its retail stores in Weston and Rockingham, the company has implemented safety protocols for employees and customers, including the use of repurposed windows, instead of plexiglass, as barriers between the cashier and customers. Courtesy photo.
“If customers wanted to push back on that we requested that they leave,” Orton said. “It’s really something we weren’t going to waver on, the safety of our employees and our fellow customers in the store.”
The holidays are the busiest time of the year for the business but Orton said because of the pandemic the company is taking steps to increase its fall business now so it’s not overwhelmed during the holidays.
“We are not going to ramp up or even attempt to handle the type of business we normally would have at Christmastime because to do so we would have to put employees at risk by putting people too close together,” he said.
The Vermont Country Store has 500 year round employees and in normal years would add more than 400 during the holidays. This year the company expects to add 320 seasonal workers.
To help its employees through the pandemic, the company increased wages, paid out its quarterly bonus early, paid a $2 an hour bonus to employees during the height of the pandemic, created an online store for employees to buy hard to find items at cost, repurposed the restaurants to provide lunches for employees a couple of days a week, and gave out a 60-day supply of multi-vitamins.
Taking A Hit
COVID-19 has hit Vermont’s retailers hard and Chris Morrow doesn’t mince words.
“It has impacted every aspect of my business from staffing, hours, buying and the Web. COVID has been the most impactful threat to our business in its 44 years,” said Morrow, who owns the iconic Northshire Bookstore in Manchester.
Like many bricks and mortar retailers, COVID-19 has pushed businesses to their limits and forced owners to become more agile and creative in order to survive.
That’s exactly what Morrow has done.
“We have reduced our operating hours, reduced staffing, changed a few people's jobs, altered our buying patterns, enabled curbside delivery and started praying,” Morrow said in an email.
He said other Manchester businesses are in the same predicament and that the upcoming holiday period will be critical for retailers. “I am worried that we will see more businesses going under early next year,” Morrow said.
If there is an upside for his business, he said people are reading more with kids’ books topping the list along with fiction, books on racism and with people home with time on their hands, cookbooks.
The Orvis Company took a hit from the pandemic furloughing workers at its 83 stores across the country, including its flagship store in Manchester and at its headquarters in Sunderland.
“In March, we had to close all our stores in the US and the UK,” said Tucker Kimball, Orvis public relations manager. “We have about 30 stores in the UK as well.”
Changes were made to its customer service operations and at its fulfillment center in Roanoke, VA, to support Orvis’ online business, Kimball said
He said the family-owned company’s first priority remains the safety of its employees.
In April, Kimball said the Perkins family had to make very difficult staffing decisions, eventually laying off 20 percent of workers at its headquarters in Sunderland.
Photo: An Orvis employee crafts a fly fishing rod at the company’s rod shop in Manchester. The company was forced to furlough workers at its retail stores across the country in March. Those workers were recalled but 20 percent of workers at the Orvis headquarters in Sunderland were laid off. Courtesy photo.“Those were layoffs, they weren’t furloughs,” he said. “We haven’t refilled any of those positions.”
Kimball said retail workers and rod shop staff who were furloughed in March are back at work.
Photo: The Orvis flagship store in Manchester. The pandemic forced the company to furlough all its workers at its 83 retail stores across the country. The workers have since been recalled. Courtesy photo.
Prior to COVID, Orvis employed 1,700 workers nationwide, including 250 at its Sunderland headquarters and 60 in its rod shop.
He said the company’s ability to “weather the storm and stabilize the business” is due in large part to its diverse portfolio of outdoor products and programs.
“We’ve absolutely seen bumps in fly fishing over the last number of months that have definitely helped support the business in that way,” Kimball said. “We’ve also seen it in dog (products) as well.”
The company sells a variety of fly rods and reels and offers lessons from beginner to advanced.
In the early days of the pandemic, Kimball said based on customer feedback the company made sure it was a resource as “a meaningful connection online.”
“We have those FF101s (fly fishing) but we created an online version that we can get out to our customers knowing that it might be harder for them to get to the stores,” he said. “We immediately started doing more with social media in terms of doing live events.”
In addition to outdoor clothing, accessories, hunting gear and luggage, Orvis is well known as a purveyor of canine products from collars and leashes to dog beds and crates.
“One of the things that we noticed and saw was that there were a lot of dog adoptions starting in early to late spring,” Kimball said. He added that pet owners also found themselves at home more with their dogs.
For low-income residents of the county, there has been a greater need for services since the pandemic struck in March.
BROC - one of five community action agencies in the state - is seeing a significant increase in food assistance, said BROC Executive Director Thomas Donahue.
Donahue, whose agency serves both Bennington and Rutland counties, said demand for assistance at its food shelves has jumped 40 percent during the pandemic. To cope with the increase, the food shelf in Bennington is now open five days a week instead of three.
Donahue said there are people using the food shelf who never found themselves in that position before.
“That is, in most cases, the direct result of the loss of employment,” he said. “It could be permanent or a furlough but regardless they’ve lost employment.”
In some cases, he said people were able to sustain themselves on expanded unemployment assistance until it ran out.
Donahue said BROC steps in and attempts to fill the food void.
“If we can take food out of the equation that stretches their paychecks or savings that much further … people with limited income can use that income to pay rent, their mortgage or their fuel bill,” he said.
BROC takes a two prong approach: Donahue said one helping people through a crisis with food or emergency fuel assistance and the other is providing a “path forward” through its micro-business and employment and training programs.
Another more serious challenge with winter approaching is homelessness.
In Bennington County, BROC has been helping 200 homeless families who have temporarily been put up in motels by the state during the pandemic.
With no guarantee the emergency program will continue, Donahue said the next challenge is housing availability.
He said many state programs have relied upon the CARES Act which expires at the end of December.
BROC has an annual budget of $5.7 million and serves 12,000 clients annually.
Bruce Edwards is a freelance writer from Southern Vermont.