Photo: Downtown Montpelier. Photo by Richardson Photography.
A matter of perspective: Strong economy, downtowns are vibrant. And. Finding workers is tough, and the county needs more housing.
by Olga Peters, Vermont Business Magazine Washington County’s economy is booming. It has a solid real estate market, and communities have weathered COVID better than expected.
But doing business in Washington County is tough. Fewer people are coming downtown because of either pandemic concerns, or they’re working remotely, and it’s hard to find enough staff.
Both statements are true, depending on where you sit. Because the economy of the state’s third most populated county isn’t either prosperity or struggle. It is a mixture.
In 2019, the county’s median household income of $62,791, was higher than the statewide median, according to the Economic and Labor Information Division of the Vermont Department of Labor. While the county’s poverty rate was slightly less than the statewide average, its percentage of children under 18 was higher, at 15.3 percent, than the statewide rate of 13 percent.
Like other places in Vermont, many communities are surviving the economic turmoil spurred by COVID-19 better than expected thanks to an influx of federal and state emergency funding.
“It’s a very exciting time to be in Barre right now,” said Cody Morrison of the Barre Area Development, Inc. “In my conversations with a lot of people and statewide networks, I've heard that Barre is doing very well.”
“I think the future for Waterbury is looking really bright,” said Mark Pomilio Jr, Revitalizing Waterbury.
Dan Groberg of Montpelier Alive said, that the local community has rallied around local businesses in a way he’s never seen before.
“And that's saying something given that Montpelier has always had quite a shop local ethos. But people have really taken it to the next level,” he said.
Eric Friedman in the Mad River Valley said, “In the last year and a half or so we're seeing a lot of folks — consultants and remote workers and other people — working from here and I think that in many ways that diversification of our economy is a really good thing.”
And businesses are struggling.
Barre business owner Alexis Dexter said efforts by multiple organizations to improve the local economy and community image have been working.
Unfortunately, she added, the pandemic stalled those efforts, at least for business owners like her.
“It's very different from being the people who are putting the money towards making it look better and being the one who stays on Main Street, literally every day of their life,” she said.
Finding workers has also been tricky.
The Barre-Montpelier labor market is Vermont’s second largest. As of the state Department of Labor’s September jobs report, the unemployment rate in the Barre-Montpelier labor market was 3.7 percent. This is lower than the statewide rate of 4.5 percent.
However, in the same report, Commissioner Michael Harrington noted that the Vermont labor force has decreased overall despite the state’s unemployment rate being close to its pre-pandemic number. Approximately 25,000 fewer people are actively looking for work.
Dexter said she has been trying to hire people for almost a year.
Morrison added, “Being from New Hampshire, I would think that I would hear more about taxes and regulation.”
“But finding workers is far and away the biggest issue that I come across,” he said.
Groberg said, “There's been actually quite a lot of demand, but not necessarily the labor to be able to accommodate that.”
“So you have businesses that have dramatically reduced hours or what services they're offering because they don't have the labor to support it,” he added.
Labor shortages and housing pose the most significant challenges to the Mad River Valley’s economy. For Friedman, the issues are interconnected.
“Everything else pales in and importance compared to those two,” he said. “It’s heartbreaking to see businesses that are so busy, that have this opportunity because the economy is scorching, and they can't stay open and take advantage of it.”
He worries that if the labor shortages impact businesses services for too long, customers will drift away over time, which will also hurt the economy.
Questions also remain about the long-term effects the pandemic might have on communities.
What if remote work becomes a permanent system? What will that mean for restaurants that rely on the lunch crowd? What will remote work mean for commercial office rentals? What if the current real estate market fosters a wider wealth gap?
Building Momentum In Barre While Addressing Challenges
Conversations around the health of the economy in Barre exemplified the yes-and of the Washington County economy.
In Morrison’s opinion, a decade of infrastructure investments has helped Barre turn a corner.
“Barre is having a resurgence,” he said.
Morrison is the executive director of Barre Area Development Inc., which was created to promote economic development in Barre City and Barre Town.
“Since about the 2009-2010 era, we've had over $110 million in capital investment in the Barre area,” he said.
These infrastructure improvements include the downtown Barre City Place building, where the state Agency of Transportation moved shortly before the pandemic.
According to Morrison, recent improvements at the 155-acre Wilson Industrial Park have fostered expansions for businesses like Vermont Creamery and the Vermont Food Bank.
Wilson Industrial Park is a collaboration between Barre Area Development and the Town of Barre.
Photo: Pearl Stree, Barre. Courtesy photo.
“But that doesn't mean that we don't have our issues,” he cautioned. “We do have an urban population, and we are in an aging state. So a lot of our issues you'll find there's a bit of a pattern with a lot of similar communities throughout Vermont.”
These issues are palpable for business owner and cat lover Alexis Dexter.
“It's tough,” she said. “The city is pretty well dead.”
“I mean, a lot of businesses went under during this and then the amount that can't get help. They can't stay open. So nobody's in town,” she said.
Dexter has owned Forget-Me-Not Flowers and Gifts in Barre for five years. In August 2020, she opened Kitty Korner Cafe next door to the flower shop.
“People who go to the cat cafe made a special trip to come to a cat cafe,” she added. “People who came to the flower shop, they had to make a special trip to do this. It's not like random folks walking up and down the streets saying, let's go there.”
The community’s response to the cafe has been great, Dexter said.
“The locals are in fairly regularly,” she said. “The courthouses right across the street from us, so people will come in from a very stressful court day and just hang out with cats or have some coffee. So it's been pretty good.”
As of October, the cafe has adopted out 386 cats, many of whom came from high-skill shelters in the southern part of the US.
Cat adoptions happened almost daily during the pandemic when people were home nearly all of the time.
As the pandemic restrictions have lessened, she has seen that not everyone realized how much work and money it can take to care for a pet.
Several people have brought back, or surrendered, cats this year, she said. Many of the animals had had health issues or were even starving when they returned to the cafe. Many have needed vet care as a result.
If someone can’t care for their pet, Dexter hopes they surrender the animal to a shelter or Humane Society before health issues begin.
Dexter said that her businesses qualified for almost no pandemic assistance. The cafe, for example, while slated to open before the pandemic, didn’t qualify for programs like the Paycheck Protection Program (PPP) because it could not show any income.
Luckily for Dexter, orders for flowers took off during the pandemic, which helped her get through the leaner parts of 2020. She also took advantage of some small bridge loans provided through the point of sale company she works with.
According to Morrison, Last year the COVID-related shutdowns hit the retail and hospitality side of the economy harder.
He said, Barre experienced COVID differently than other areas of Washington County.
Barre’s economy has a robust manufacturing and industrial base. In comparison, Montpelier and Mad River Valley tend towards professional services or tourism, he said.
“So there are certain industries that have been doing very well,” he said
As an example, Morrison stepped into the executive director role on October 5, 2020. Since then, he said, more than 20 businesses have either expanded, opened, or relocated to Barre.
Photo: Ribbon cutting at Brave. Courtesy Photo.
Staffing is a big issue for businesses in Barre.
Morrison said finding workers is the most prominent issue he hears about from local businesses.
Dexter said she has five employees. She would be thrilled to hire at least two more.
“I've been looking for just one to make it so people can have a day off now and then for most of the year,” she said.
At the cafe, Dexter said, “I've had people who don't even make it 30 days.”
Barre is completing the final stages of a community visit by the Vermont Council on Rural Development. Housing is one of the significant issues identified during the process, according to Morrison.
Many people are taking a hard look at ways to improve and expand the local housing stock. This includes government officials in Barre City and developers in Barre Town.
Morrison periodically checks the Apartments.com app on his phone to get a sense of what is happening in the Barre rental market.
“There are seven rentals that are available in Barre now,” he noted. “Last night, I checked [Vermont Joblink], and within five miles of Barre, there are, I think, 177 job openings. So there are a lot of jobs with not enough housing.”
Morrison said Barre may not have the affordability issues as other communities like Burlington or the Upper Valley. It still doesn’t have enough housing.
In his opinion, it especially doesn’t have enough housing for many of the people looking right now.
Morrison graduated high school on June 5, 2009. He said Millennials and Gen Z started adulthood during the Great Recession, subprime mortgage crisis, and heaps of student loan debt.
“Homeownership for younger generations is seen as much more of an aspiration than the inevitability that it was in previous generations,” he said.
The tourism sector of the local economy seems to be picking back up, said Morrison and Dexter.
Dexter joked that folks in the local businesses stared in amazement when a recent bus group stopped in town.
In Montpelier, A Vibrant Downtown And A Buy-Local Ethos (And Fewer Commuters?)
For Groberg, Montpelier has remained resilient.
Last year, the business community felt panic about surviving COVID-19, he said. Various factors, such as people committed to shopping locally, local philanthropy, state grants, and federal funds, kept businesses going.
According to Groberg, executive director for Montpelier Alive, the downtown’s first-floor vacancy rate is almost unchanged from before the pandemic.
He attributes the loss of very few businesses and the opening of several new ones to community support.
Despite the good news, Groberg also noted that Montpelier’s economy has its pluses and minuses.
“It's kind of an interesting time, I would say. There's been a lot of tourism this fall. It's been very busy in town,” Groberg said. “And the people who are able to find employees have been doing very well. But the labor shortage has very acutely affected businesses here.”
A big what if for Groberg is remote work. Suppose more companies make remote work a regular business practice. In that case, Groberg wonders how fewer people downtown during the day will affect the economy.
As the seat of state government and large employers such as National Life Group, the city welcomes thousands of daily commuters.
Historically, the city has described itself as home to 8,000 residents but as many as 20,000 daily commuters and visitors, he said.
With many people still working from home, Groberg said it is unclear what a drop in visitors will mean for the restaurants and shops that have relied on the daily lunch crowd.
“As they [companies] figure out what the future of work looks like, are they going to give up office space?” he asked. “And what impact will that have on upper floor vacancies in Montpellier?”
Vacant office space could become an opportunity, Groberg added. Former offices could become new housing.
“Historically, we’ve had something like a 2 percent residential vacancy, which is lower than ideal, and it's been just further exacerbated this year, for sure,” he explained.
A few of the economic development projects happening in Montpelier include renovations to the 15,000 square-foot Montpelier Granite Works Building.
Connor Group, LLP purchased the building last year.
The company received brownfield clean-up finding through the Agency of Commerce & Community Development’s revolving loan fund and the Northwest Regional Planning Commission. According to ACCD, each organization contributed $200,000 towards the mitigation work expected to cost $500,000.
Some of the businesses that opened during the pandemic include:
Enna, which describes itself as a global deli, serves breakfast and lunch
Oakes & Evelyn is a farm-to-table restaurant.
Yellow Mustard Delicatessen & Bakery is also owned by Jeffrey Stoudt, who operates Buddy’s Famous in Montpelier.
Namaste Indian & Nepali Kitchen’s owner, Krishna Paudel, who grew up in Nepal, told The Bridge newspaper that she has always dreamed of opening a restaurant.
minikin is a new kid clothing and home decor store.
The Montpelier Development Corporation has announced a new grant program.
The Montpelier Growth Grant provides up to $100,000 for businesses looking to locate or expand in the city.
“I think Montpellier still has a lot to offer,” Groberg said. “And that's why we've seen the new businesses coming into town because we still have that vibrant downtown, we still have a very supportive local community, we still have a strong employee base here, so a lot of opportunity for people who want to come.”
A Brand New Main Street For Waterbury
“We’re not standing still here in Waterbury,” said Mark Pomilio, Jr. “We love to get things done to help develop this town and make it look beautiful for everyone.”
This year Waterbury completed a three-year Main Street reconstruction project. Along with water and electrical infrastructure, the final project features accessible sidewalks, way-finding signage, informational kiosks, new streetlamps, paving, and parking.
Grants paid for 95 percent of the $20 million project, said Pomilio, who started as Revitalizing Waterbury’s economic development director in March 2020.
Pomilio said, in a way, the Main Street project and pandemic were well-timed. Due to the construction on Main Street, many businesses had prepared for a drop in revenues. Hence, when the pandemic shutdowns happened, this preparedness softened the decrease in customers a little.
Photo: New signage for Waterbury. Courtesy photo.
In Pomilio’s opinion, many of the challenges facing Waterbury’s economy also serve as potential opportunities.
For example, Keurig Dr. Pepper announced this autumn that the approximately 200 employees that worked at the Pilgrim Park facility offices before shifting to remote work during the pandemic would not return to Waterbury. Instead, they would continue working remotely.
The company has been slowly closing its Waterbury locations over several years as part of a broader plan to relocate its research and design operations to Texas, according to reporting in VTDigger. The company still maintains offices in Chittenden County.
Yet Keurig Dr. Pepper’s decision to move out of Waterbury allows for new, diverse businesses to come into Pilgrim Park, Pomilio said.
In 2019, Cabot Hosiery Mills, maker of Darn Tough socks, opened a new knighting factory in Waterbury in a former Keurig Dr. Pepper building, Pomilio said.
According to Pomilio, he’s taken multiple calls from businesses inside and outside Vermont interested in locating to Waterbury.
These inquiries range from companies seeking large warehouses to less than 1,000 square feet to office spaces.
Some of the reasons companies are eyeing Waterbury are the community’s proximity to Interstate 89 and the Montpelier-Burlington corridor.
Pomilio said the town’s quality of life and outdoor recreation opportunities also rank high for these business owners.
Revitalizing Waterbury is providing ongoing support for local entrepreneurs. Pomilio releases a monthly newsletter listing potential funding opportunities such as grants, news on professional development webinars, and other helpful information. The newsletter started as a way to stay connected during the pandemic, he said.
“We're a very tight-knit community. I think the community gets involved a lot in things that other communities around the country with the same amount of people don't do,” he said.
Diversifying A Tourist Economy In The Mad River Valley
The Mad River Valley’s economy is running hot, according to Eric Friedman, executive director of the Mad River Valley Chamber of Commerce.
Since the pandemic started, more people have been working from home in general, and those with vacation homes have relocated to the area, at least during the pandemic, he said.
Nearly half of the valley’s residential market consists of vacation homes, said Friedman. The influx of people has helped the local economy.
He said that tourism and outdoor recreation might have attracted them to this area, but they’re staying for the quality of life.
The summer tourist season was strong. As of the end of October, the foliage season was also promising, he said.
Labor issues are one of the area’s most significant challenges right now.
“Labor issues are impacting the ability of businesses to be open as much as they would like to be open to take advantage of the traffic that's here,” he said.
In Friedman’s opinion, part of the labor shortage is linked to insufficient housing. Members of the Mad River planning district have made new housing one of their priorities.
The Man River Valley is an interconnected, multi-town community. In 1985, the towns of Fayston, Waitsfield, and Warren created a joint planning district. Friedman credits the district with helping maintain the valley’s character.
“We have not had a lot of the development problems and issues that many of our other towns have had," Friedman said.
Friedman serves on a steering committee for the district.
"It's really awesome to see the towns working together to make sure that their town plans and their zoning are consistent," he added.
He enjoys watching the different communities solve problems like housing and infrastructure together.
The planning district is updating zoning to support septic and water systems to enable more development in the town centers.
“We have housing issues, up the wazoo every which way you look,” he said.
Most of the challenges have to do with people finding shelter they can afford. He added that this is a challenge for workers across the entire income spectrum but even more difficult for people in the service industry.
He said that the planning district is preparing projects in anticipation of the federal American Rescue Plan Act (ARPA) funds.
“And it's really awesome to see the communities and the town governments working together for the common good,” he said.
The Best of Route 100, a regional marketing collaboration between Mad River, Revitalizing Waterbury, and Stowe Area Association, continues to grow.
Marketing the different communities and opportunities are stronger when done together, he added.
“And the fact of the matter is when people came to any one of these places, they go back and forth to the others. So why don't we embrace that and sort of work together on that,” he said.
Last year, the collaboration received $30,000 from the state Restart Vermont Regional Marketing Grant from the ACCD, he said. The collaborative put the money towards a new website, collective advertising, and social media efforts. The organization is currently applying for a grant focused on incorporating diversity and inclusion practices into its marketing.
“I've lived here for a long time, and we've had our own issues over the years,” he said. “And it is really cool the way this community works together.”
Preparing For Snow At Sugarbush
“The one-liner out of the 2020-2021 ski season is probably that; obviously, it was worse than a normal year, but it was a lot better than we expected it to be,” said John Bleh, public relations and communications at Sugarbush Resort. “So, at the end of the day, it actually ended up being a pretty good year for us.”
Indigenous People’s Day marked the end of Sugarbush’s summer operations. Weather permitting — and snowmaking permitting — the mountain aims to open its 2021-2022 ski season the Saturday before Thanksgiving, Bleh said.
One big project wrapping up at Sugarbush is the renovation of the Mount Ellen base lodge.
Photo: Vermont Adaptive photo from September of progress made on new facility at Mt Ellen Sugarbush. Courtesy photo
Nonprofit Vermont Adaptive Ski & Sports is finishing up a multi-million expansion at Mt Ellen. The organization designs outdoor recreation activities, such as skiing, snowshoeing, and sailing, for people with disabilities.
The lodge will also have other upgrades like an elevator, restrooms on the upper floors, a new deck and windows.
The mountain is carrying forward some of its pandemic adaptations popular with patrons.
For example, online food ordering, the ability to get takeout at the mountain’s restaurants, scheduling ski lessons online, and renting private cabanas for the day.
Bleh said Alterra Mountain Company’s purchase of Sugarbush last year has served the smaller ski area well. The larger company has had the financial strength to weather the pandemic, he said.
In addition to Sugarbush, Alterra features the Ikon Pass and also owns several ski areas in the US (Palisades Tahoe, Steamboat, Mammoth), and Canada (Tremblant), as well as Stratton Mountain Resort in Vermont.
Last year, Sugarbush didn’t hire foreign workers because of the pandemic, he said. He expects it will this year.
The ski industry, in general, has struggled to find workers for several years, according to Bleh. This is one reason many have moved towards hiring employees outside the US through the J-1 student visa and H-2B temporary visa programs.
Sugarbush employs approximately 1,000 workers during the ski season and 100 in the off-season. Bleh anticipates Sugarbush will hire around 100 students with J-1 visas this season.
This summer, Sugarbush increased its starting wage to $15-an-hour as one of many efforts to attract workers. The ski area is also expanding employee housing.
Referring to housing, Bleh said, “That's something that's been a real thorn in the ski industry’s side as a whole, particularly as second homeowners, you know… as real estate gets gobbled up here.”
“It's very difficult for staff and typically seasonal staff to find a six-month rental or even a year-long rental,” he said.
Bleh thinks folks should be excited about the ski season. The industry proved last year that it could operate safely and effectively.
“So people should be optimistic and feel good about coming back and skiing,” he said.
Looking Ahead To The Heating Season At VSECU
Last year, Vermont State Employees Credit Union's experience mirrored other financial institutions. For example, the credit union responded to PPP applications and mortgage requests.
This year, the rate of mortgage applications has remained steady. Requests for auto loans have decreased, which VSECU staff attribute to an increase in automobile prices and a drop in the number of used cars available, explained Community Impact Officer Simeon Chapin.
Debit card usage is also up. Members appear to be using debit cards as often as credit cards when shopping online.
The credit union is also seeing a jump in fraud attempts.
VSECU, as a financial institution, is not alone in this, said Chapin, who praised the credit union’s fraud department for keeping pace with fraudsters.
The credit union has released new security measures, including features built into VSECU’s Edge Pay transaction card.
“It’s called a transaction card because no one uses checks anymore,” explained Chapin.
Statewide, Chapin said VSECU closed a number of its branches over the past year due to a combination of COVID protocols and staff shortages.
“We’ve maintained service at all locations through our video tellers,” he added.
The credit union has also launched a scheduler service so members can reserve a specific time to speak with staff.
“That is another added level of convenience and security for members who are needing to come in for that conversation around a mortgage or the conversation around new account openings and things like this,” he said.
In Washington County specifically, the credit union had staffing issues at its Berlin and Montpelier branches. To mitigate the shortages, the credit union has closed its Berlin location and moved staff to Montpelier.
This way, Montpelier can stay open, Chapin said. ATM services are still available in Berlin.
Over the summer, the credit union has filled several open positions, he added.
The VSECU recruitment team stressed to Chapin that the credit union’s staffing issues existed before the pandemic. Chapin said that the number of open positions is not related to the expanded pandemic unemployment benefits that ended in early autumn.
“We see a lot of people who are interested in part-time work and wanting to have some more flexibility,” he said.
“We don't have any data to track on this, but through conversations with people, we're finding that the main hurdle for people to come back into the workforce is childcare,” he added. “That's a real thing that people have to wrestle with, I think both in the cost and ultimately availability.”
VSECU members are expressing concerns about the rising costs of oil and propane as the heating season begins.
“We’re looking at these issues,” said Chapin. “We know that the energy burden on low-income Vermonters is extremely challenging.”
To help lower costs, VSECU offers a fuel buying program called VHeat. The goal of the program is to spread the cost of heating out across an entire year. VSECU negotiates with multiple fuel dealers on behalf of members to purchase fuel such as propane, oil, kerosene, or wood pellets.
“Well, I think like many people, we're keeping our eye on what's happening in the economy overall and people's ability to continue to have economic stability,” he said. “We're looking at our own loan portfolio and forgiveness we've given during the pandemic, and will people be able to bounce back and keep things moving.”
Real Estate: Still Busy
Real estate in Washington County has calmed down a little since the summer. Inventory is still low, which means when homes are put up for sale, they receive a lot of interest.
“We're handling a number of multiple offer situations, but now it's more typical to have a few bids,” said Tim Heney, principal broker of Heney Realtors. “But at one point, we had like 10 or 16 bids go into a spreadsheet in order to try to help people sort out which was the best one for them.”
The average sale price in the county has increased approximately 14 percent in the 12-month period of October 2020 - October 2021 compared to the same 2019-2020 time frame, said Heney.
He said that the number of days on the market in the Montpelier area has decreased from an average of 57 to approximately 29.
For Washington County, the average number of days on the market decreased from 101 days to 51 days.
Heney described the Washington County home market as mostly primary residential, except for the communities abutting the resort areas of Sugarbush and Mad River Glen.
In Heney’s opinion, the county’s hot real estate market is not just because people from out of state are moving to the area. He said the local housing market was already busy.
One trend Heney has noted is an increased number of land sales. From October 2019 to October 2020, there were 115 land sales in Washington County, he said. For the most recent 12 months, that total has been 198.
The number of days a piece of land is on the market has dropped significantly in the county from 374 to 25.
Most of the land sales he has worked on are for people wanting to build single-family homes.
Regardless of what the market is doing, Heney said people should always stick to the fundamentals. Make sure the house is a good fit, and in a location you like, he said.
“Don't get sucked into the hype of some of this,” he said.
With so many people working remotely, Heney said the commercial office rental market is in flux.
While some companies have relinquished their office space, individuals tired of working at their kitchen tables are renting private offices for remote work.
“Across the street from where I'm working right now, a company has a substantial downtown space, in excess of 10,000 square feet, that they lease,” Heney explained. “There are three to five employees a day coming in. So, without a doubt, they will work through their lease and figure out what they need and downsize.”
“I think that's going to be a factor everywhere,” he added.
Green Light Real Estate, based in Montpelier, recently added branches in Barre and Northfield.
The expansion has been in the works for a while and isn’t in response to the uptick in sales during the pandemic, said Ray Mikus, principal broker, and owner.
“I’m of the opinion that location really matters. And we're just better able to service those clients when we're local,” he said.
Each town has its own unique terroir depending on the types of jobs nearby, its schools, and its downtown, and this mix influences the local housing market, said Ray Mikus.
“I grew up in Michigan and never thought any one town was different from the next,” he said. “Here, every town has its own personality.”
According to Mikus, houses are going under contract quickly and often for above the asking price.
According to Mikus, the average time on the market in Washington County was seven days in the third quarter of this year.
The county’s median sales price for the same period was $300,000, slightly below the state median sale price of $330,000.
Clients expect good internet and cell coverage. While the state has a lot of great plans to roll out broadband, those solutions don’t help people who need connectivity now, he added.
“I mean, it's 2021. And cell coverage still is spotty in people's houses. It's hard for people to get behind a property like that sometimes,” he said.
Mikus wonders what will happen when the market shifts from a seller's to a buyer's market. Because it always does.
"And when it shifts, are people going to be able to disabuse themselves from past information and be and live in the current market?” he asked.
But Mikus also wonders how this current market will influence the housing crisis already happening in Washington County [see sidebar].
In the meantime, as communities in Washington County navigate the next phase of the pandemic, they are preparing to receive their portions of the almost $200 million allocated to Vermont’s municipalities through ARPA, a sum many have called a once-in-a-generation opportunity.
Morrison said, “We have a really great opportunity to create an environment that will bring more younger people in here to be the next-generation workforce that will ultimately work in the quarries, that will work in the retail stores, that will work in the classrooms.”
Olga Peters is a freelance writer from Windham County.