by Bruce Edwards, Vermont Business Magazine The Northeast Kingdom has never had it easy. Tucked away in the northern most reaches of the state, the region inevitably takes the brunt of every recession and never fully enjoys the fruits of the eventual economic recovery. And it could be another two years before the big ski resorts – Jay Peak and Burke – are sold. Some 20 years ago a number of individuals and organizations got together to promote the Kingdom’s strengths.
Today, the Northeast Kingdom Collaborative continues with that mission developing strategies and funding sources to improve the economy of the three-county region.
Katherine Sims, the Collaborative’s director, said the organization has focused on developing the creative economy, recreation and food sectors “recognizing those are the real bright spots in our economy whether its world class beer producers or the amazing mountain bike trails of Kingdom Trails or Catamount Arts and Bread and Puppet.”
“We have some really unique, authentic … experiences that make it a wonderful place to live, work and recreate,” said Sims, the group’s first paid staff member.
The Collaborative’s other priority is leadership development.
Sims said a talent pipeline is essential to do the work of advancing a vibrant rural economy.
“We’ve spent the last six months listening, what’s already out there, what’s working in our communities, what are the gaps and challenges,” Sims said, “and then building a platform for action, a set of eight strategies that we think will have the biggest impact on these priority areas for our region.”
She said the Collaborative is in the final stages of preparing an action plan to be released in December “to help focus and build alignment among organizations and businesses within our community and funders who can help move that work forward.”
At a series of summer leadership summits across the Northeast Kingdom, a total of 150 people showed up in support of the Collaborative’s efforts, she said.
Sims said while the region has its challenges, it also has innumerable assets.
“We want to do more to make sure our region is vibrant and thriving,” she said.
T&R
“Slow but steadily improving” is how Darcie McCann describes the local economy, especially in the area of tourism and recreation.
“Burke Mountain is experiencing strong growth with the Burke Hotel and Conference Center,” said McCann, executive director of the Northeast Kingdom Chamber of Commerce. “Jay Peak has had very good skiing years the last couple of years and continues to make improvements to the mountain resort there.”
Both Jay Peak and Burke Mountain remain in court-ordered receivership following the EB-5 visa/foreign investment scandal.
“The only impressions that I have of the receiver has been extremely positive,” McCann said.
McCann and other economic development officials repeatedly singled out the success of Kingdom Trails in East Burke – a network of hiking, biking and cross-country ski trails.
She said Kingdom Trails continues to add to its network that attract a strong core of outdoor enthusiasts that extends beyond New England and into Canada.
Tara Robinson Holt of the St Johnsbury Chamber of Commerce said based on Welcome Center figures both the summer and fall seasons saw an increase in visitors from last season.
“We get a lot of visitors doing New England tours and we’re a really convenient stop along their way, passing from Maine and the White Mountains over to the Adirondack Mountains,” she said.
Holt too singled out Kingdom Trails and other attractions including Lake Memphremagog.
“Of course the arts and culture campus here right within town that would include the Fairbanks Museum, History and Heritage Center, the St Johnsbury Athenaeum and Catamount Arts are a huge draw,” she said.
Not to be overlooked is artist Stephen Huneck’s Dog Mountain.
“We’re seeing people that are coming to this region just because of Dog Mountain,” Holt said.
The 150-acre mountain top is Huneck and his wife Gwen’s tribute to canines. Dog Mountain features a gallery of the late artist’s work and Dog Chapel.
“He built this beautiful chapel where people can sit with their memories of pets that have passed,” Holt said.
Dog Mountain is open to the public and their dogs. It also has hiking trails and “dog ponds.”
For the last two summers, she said Catamount Arts has sponsored the Levitt AMP St. Johnsbury Music Series, 10-weeks of free music at Dog Mountain.
“Those were incredible draws,” Holt said.
She added that all the lodging in St Johnsbury is dog friendly.
Kingdom Trails
One of the jewels of the Northeast Kingdom is Kingdom Trails, a four-season network of more than 100 miles of trails enjoyed by residents and visitors alike for running, hiking, biking, snow shoeing and cross-country skiing.
“Our mission is to provide recreation, education opportunities by managing, maintaining, building more trails to foster the health of our local community and regional economy,” said Abby Long, Northeast Kingdom Trail Association executive director.
The 20-year-old nonprofit supports and maintains the trail system through annual memberships and day passes. An individual membership is $75 and a family membership is $150. Northeast Kingdom residents receive a discount of 33 percent.
Day passes are $15 and can be purchased at the welcome center in East Burke.
In 2017, Kingdom Trails had 1,363 family annual memberships and 1,956 individual annual memberships.
Long said the trail network would not be possible without the generosity of the 92 private landowners.
Last year, Kingdom Trails logged 115,000 visits.
She said those visits have a definite economic impact.
A 2016 economic impact study by Vermont Trails and Greenway Council determined that each visit equals $115 spent each day on lodging, food, gas etc., Long said.
She also said 75 percent of trail users are from out of state with three-quarters of those visitors staying 2.75 days.
“If you take that 2.75 days and times it by $115 spent each day, our direct spending totals up to $10 million,” Long said.
This summer the trail network extended into Essex County.
There are numerous trail networks around the state but Long said the trails that traverse the Northeast Kingdom are a bit special.
“I think it’s our terrain,” Long said. “Our original trail network started on Darling Ridge, which is surrounded by 360 degrees of pastoral views.”
She said those views encompass the Darling Mansion, Willoughby Gap, and farms.
Long said the area is unique because of its sand deposits. It allows the trail network to stay open even after days of rainy weather when other trails are closed.
Kingdom Trails is for all levels of ability, which she said makes it attractive to families with young children.
Long said the organization is doing more to educate local youth with the help of an AmeriCorps volunteer.
Jay & Burke
Jay Peak spokesman JJ Toland said the winter season looks promising based on a record volume of business the resort booked at the recent Ottawa and Toronto ski shows.
“Basically with Ottawa and Toronto we sold out almost the entirety of March for the Quebec ski break and the Ontario break,” Toland said.
He said it means it will be “very hard” to find a hotel room at Jay Peak in March.
The resort’s hockey tournament business is booked every weekend through April, he said.
Toland said season pass sales are up 18 percent and pass sales revenues are up 22 percent from a year ago.
Jay Peak employs 1,500 people during the peak ski season. To fill those positions, Toland said the resort is offering incentives and is also once againrelying on the J-1 visa program for foreign workers.
At Burke Mountain, “reservations are pacing on par with last year and in some cases ahead,” said Jessica Sechler, the resort’s sales and marketing director.
“The summer 2018 season exceeded expectations with July revenues being the second largest since opening, so we are anticipating a strong winter season ahead,” Sechler said in an email.
During the peak winter season, Burke has 300 employees.
For the past three years, both Jay Peak and Burke Mountain have been at the center of a financial scandal involving the EB-5 visa program for foreign investors.
The fallout resulted in a court-appointed receiver taking over the resorts.
Once federal receiver Michael Goldberg gives the OK, the resorts will be put up for sale.
But Toland said it will likely be another two years before Jay has a new owner.
“We haven’t had anyone play scratch and sniff with us so to speak and there’s still a number of things that still have to fall in place for us to be officially on the market,” he said.
Ripple effect
Tourism and recreation are key drivers of the Kingdom’s economy, a fact not lost on Jim Kisch, president of Passumpsic Bank.
Kisch said he’s noticed a surge in the recreational economy.
“The real bright spot around here is that outside money,” Kisch said.
He said visitors represent household incomes that are “far north” of the average household incomes of Northeast Kingdom residents.
Kisch said in places like Lyndonville visitor spending is going to support restaurants, stores, resorts, inns and convenience stores.
He said that is turn is helping to drive commercial lending.
“Our commercial lenders in that market are seeing purchases of land and purchases of businesses and lending to businesses such as the hospitality arena,” he said.
Kisch said the Northeast Kingdom Collaborative is helping to promote the recreation and creative economies.
“In looking at the Northeast Kingdom as a destination for arts, entertainment … and fostering an environment where creativity is supported,” he said.
Manufacturing also remains an integral part of the economy and Kisch said from his vantage point the Kingdom’s manufacturers are doing well.
Humming along
If anyone has a handle on the economy of the region it’s David Snedeker, executive director of the Northeastern Vermont Development Association.
“It seems to be going fairly well,” Snedeker said. “I work a lot with the manufacturers and everybody seems to be humming along and looking for workers, which is a big problem I think.”
The Kingdom has a diverse number of manufacturers: Weidmann Electrical Technology, NSA Industries, Revision Military, Vermont Aerospace Industries, Fairbanks Scales and Ethan Allen among others.
He said craft brewers and distillers are busy as well.
Health care and education are no small players in the economy.
There’s Northeastern Vermont Regional Hospitalin Saint Johnsbury and Northern Vermont University in Lyndon.
Snedeker said NSA, the St Johnsbury contract manufacturer, occupies three buildings totaling 190,000 square feet.
“It’s my understanding they’re looking for more space or will be soon so I think they’re getting plenty of orders,” he said.
The area has attracted two smaller Canadian companies: Pratiko, which makes braking systems for wheel chairs and walkers, and Gilbert-Tech a metal fabricator.
Snedeker said one or two other Canadian companies may also set up shop south of the border. One is a Montreal metals manufacturing company that is looking to relocate its Colorado operation to Vermont, he said. He said the other company is a warehousing and distribution company that’s eyeing a location in Newport.
In Hardwick, Vermont Food Ventures Center is a shared space facility for incubator food producers.
Because the facility is limited in size, a larger facility is in the works for food producers who want to grow their business.
“We’re actually working with the town and the Center for an Agricultural Economy and we’re in the planning stages for a 25,000-square-foot processing-warehouse facility in Hardwick,” Snedeker said.
Jasper Hill
Like other parts of the state, the Northeast Kingdom has its share of value-added agricultural products. At the top of that list is maple syrup and cheese.
Cheese in the Kingdom is synonymous with Jasper Hill Farm.
“We are continuing to grow each year,” said Zoe Brickley, Jasper Hill’s director of development and marketing. “We’re kind of emerging from our startup phase and I think reaching a certain level of maturity in our fifteenth year.”
Brickley said Jasper Hill is now sold in major metropolitan areas across the country.
She said one of the challenges is the change in the specialty food arena. “Whole Foods is a big customer so with the acquisition by Amazon that’s made this an interesting year,” Brickley said.
Jasper Hill sells 12 cheeses, aged in a 22,000-square-foot cavern in Greensboro Bend.
The company’s newest cheese on the market is Little Hosmer, which is similar to brie. Named after a small pond in Craftsbury, Little Hosmer won Best New Cheese at the 2017 World Cheese Awards.
Brickley said Little Hosmer was introduced in response to a shift in the marketplace and at a price point that’s under $10.
In addition to its original herd of 45 Ayrshire cows, Jasper Hill also produces milk for its cheeses from a herd of Holsteins at Andersonville Farm in Glover.
To keep up with demand, Jasper Hill also operates a second creamery at the Vermont Food Venture Center.
Jasper Hill is also creating more holistic agricultural systems around artisan cheesemaking forging a partnership with Pete’s Greens to produce whey-fed pork products under the label VT 99 Meats, Brickley said.
Jasper Hill is also branching out into hemp, planting seven acres this year.
“So we can imagine really high-quality concentrate CBD products being another brand extension,” she said. (CBD oil is used for pain relief and for other ailments).
Jasper Hill has 80 employees.
St Johnsbury
“We have a distillery that’s making a multi-million-dollar investment in St Johnsbury, St. Johnsbury Distillery, which makes rums and they are amazing,” said McCann of the Northeast Kingdom’s chamber.
She said the distillery, owned by Dan and Brendan Hughes, outgrew its space in Barnet and will relocate into the former St. Johnsbury Hardware “in the heart of the downtown.”
The distillery already has a tasting room on Main Street that’s open two days a week.
“Dan Hughes and his entire family are very committed to doing whatever he can to improve and strengthen the economy of St Johnsbury through manufacturing the rum as well as bringing in people,” McCann said.
Holt of the St Johnsbury chamber said the expansion of the St Johnsbury Distillery and the possible renovation of the Depot Square building are two indicators that boosts confidence in the business community.
“It’s really exciting,” Holt said. “And we’re seeing movement and interest of property owners adjacent to those pieces thinking about their next step.”
As far as the retail sector, McCann stressed the importance of residents to shop locally. She said in addition to online shopping far too many people make the half-hour drive across the border Littleton to shop at big box stores in sales-tax free New Hampshire.
Buying locally as much as possible “strengthens our economy, it strengthens our particular region, and helps in attracting residents, manufacturers and just the overall economy in general,” McCann said.
Statistics
The unemployment rate in the Northeast Kingdom has improved over the last year in two of the three counties with Orleans County being the exception at 4.5 percent in September, up from 3.8 percent a year earlier.
Essex County saw its unemployment rate dip to 3.1 percent in September from 3.8 percent while Caledonia experienced a more modest decline to 2.9 percent from 3.1 percent for the same period last year.
The statewide average in September was 2.9 percent (seasonally adjusted. County figures are not seasonally adjusted).
Median family income in the three-county region trails the statewide median of $56,104, according to the U.S. Census Bureau. The median family income in Caledonia County is $46,104; Orleans, $43,959; and Essex, $39,467.
The income numbers are reflected in a higher level of poverty, which ranges from 13.5 percent to 15.7 percent. The statewide average is 11.3 percent.
Challenges
Kisch agreed with other community and business leaders that the region is not without its challenges, some not dissimilar from rural America.
“We’ve got an aging demographic,” he said. “We look at the average age, we look at the young people seeking opportunities that are outside of our rural market.”
He said that in turn puts a cap on the economy because there are fewer workers.
Kisch said he is seeing some positive signs that might give cause for optimism.
He said some families are moving back to the Kingdom who have a vacation home and decide to work and live here year-round.
“That is very encouraging,” he said.
However, the lack of affordable housing and housing in general remains a challenge.
“I worry about the lack of market rent though,” Kisch. “I worry about the fact that if you want to return to the region or if you’re a young person that wants to graduate from college and come back and start their career in the Northeast Kingdom what do you do for housing.”
Kisch said the residential mortgage market has slowed which coincides with an uptick in interest rates. For some borrowers, the rate increase has put a new home out of reach, he said.
For home owners with an existing mortgage, he said the bank has experienced the lowest level of delinquencies since 2008, the onset of what is called the Great Recession.
Kisch also said the bank has seen strong growth in its auto lending business. “It’s really a sign that there is extra leftover every check to go out and get a new vehicle,” he said.
Bill Hartman of Poulin Lumber in Derby said the home construction market is showing signs of improvement.
“Comparing this year to the last two or three years there’s certainly an uptick in business,” said Hartman, president of Poulin Lumber. “There’s a little bit more new home starts than we’ve typically seen.”
Hartman said business at his Derby store also indicates that homeowners are doing more renovations, additions and maintenance projects.
He said another positive sign is that contractors are pouring foundations later in the year than in years past.
Poulin typically gauges his level of “busyness” this time of year by the demand for floor systems and roof trusses, Hartman said. “We’ve seen an uptick in that activity.”
Earlier this year, he said contractors were already booked out two to three months, which typically hasn’t been the case over the last two to three years.
Right now, the only challenge is the weather which could put a damper on new outdoor work, he said.
Since doubling in price early this year, lumber prices have fallen dramatically since September, Hartman said.
He said oversupply along with imported European wood forced suppliers to bring down their prices.
Poulin Lumber also has stores in Hardwick and Williamstown. The Derby store and lumberyard has 42 employees.
Home prices in the Kingdom remain below the statewide September median sales price of $217,000, according to the market data report from the Vermont Association of Realtors.
In Essex, the median sales price was $126,5000; Caledonia, $144,500; and Orleans, $160,000.
Bruce Edwards is a freelance writer from Southern Vermont.