Rutland leaders stalwart in midst of harsh downturn

For those familiar with the downtown Rutland business district, one painful memory may be empty storefronts at opposite corners of Merchants Row’s intersection with Business Route 4.

For Brandonites, it may be the sight of the parking lots at the former Vermont Tubbs and Nexus factories, both emptied within weeks. For residents of many Rutland County communities, it may be the New Year starting without the First Night celebration.

One way or another, Rutland County has shown it is not immune to national economic forces, or perhaps follies. Sales slumping along with unemployment rising, municipal services cut and state service cuts on the way, the leading newspaper shrinking in size – the list of signs and symptoms could go on and on.

At the same time, though, Rutland County leaders insist there is room for optimism. Unused industrial spaces may return to life as the “green” economy takes hold in Vermont and elsewhere; rail service may return to western Vermont; and people who don’t want to turn cash into long-distance vacations may want to come to a peaceful place within driving distance instead (particularly if they can eat good local food as well as breathe clean air).

Rutland County is known for making strategic plans even at times when that would seem most futile, and for rolling up its collective sleeves when there is something to be done. As creative economy initiatives around the state have shown, innovation comes in many forms, and in Rutland it has a history of occurring in the field of commercial development as well.

STAT

Broad generalizations and anecdotal accounts can be measured against statistics. State of Vermont tax totals make it evident how deeply the past year and a half has cut into Rutland County’s economy.

Property transfer tax receipts reflected the plummeting real estate market. In 2007, those Rutland County taxes sent $4,226,700 to the State; in 2008, they plunged 101 percent, to $2,103,262. There were no year-to-year comparisons for the figures from Jan. 1 through April 30, 2009, but with the total collected from all types of transfers at $304,692, it did not seem as if the real estate sector was rebounding.

State housing data showed that Rutland County foreclosures increased from 163 in 2007 to 262 in 2008, or more than 60 percent. Around the state, the total for 2007 was 1,209 and versus 1,639 in 2008, an increase of 35.6 percent. Through April, a third of the year, Rutland County saw 60 foreclosures; if the rest of the year held at that rate, 2009 would show a decline to 180, which would still be more than for 2007..

Retail sales taxes in the third quarter of 2008 – July 1 to Sept. 30--dropped from $130,480 in 2007 to $124,461 in 2008, or 4.6 percent, for the county as a whole. Fiscal year figures (July 1, 2006-June 30, 2007 and July 1, 2007-June 30, 2008), the most recent annual comparison available, showed retail receipts going from $559,134,704 to $543,499,530, for a 2.8 percent decrease. That was the steepest decline among the 14 counties. Sources in Rutland agreed that the recession’s effects had worsened as 2008 went on, which probably accounts for the greater percentage decrease after the end of the fiscal year.

As downtown Rutland vacancies have increased, and as the Route 7 South area of Rutland Town has seen Act 250 approval for yet another shopping plaza, there have been fears that the downtown business district is having its shoppers lured away by franchised retailers. The fiscal year sales figures do not support that theory.

It was Rutland City that saw an increase in taxable retail receipts, from $238,316,287 to $242,295,375, up 1.7 percent. To some extent this may have reflected a national trend toward shopping at major discounters – and the downtown Rutland Plaza has Wal-Mart for its anchor store. Meanwhile, Rutland Town’s fiscal year total went from $158,253,187 to $138,381,933 – a 15.1 percent decrease. Having 10 vacancies appear in the Diamond Run Mall (total as of May, 2009) hasn’t helped those totals.

Meals, rooms, and alcohol taxable receipts for Rutland County for the two fiscal years saw meals totals drop 1.7 percent (from $80,992,975 to $79,577,824) and alcohol receipts go down 4.7 percent ($17,351,531 to $ 16,537,158). But the rooms tax totals rose 1.7 percent ($44,260,110 to $45,010,266).

Statewide, all three types of taxes rose during that period: meals 3.2 percent, rooms 9.7 percent, and alcohol 3.9 percent.

Helping to drive all this is the employment situation. Comparing March 2008 with March 2009 – the latest numbers available at press time – the number of unemployed rose from 1,900 to 3,200, and the unemployment rate went from 5.3 percent (5.0 for Vermont as a whole) to 9.3 percent (Vermont 7.9 percent).

Also worth noting is the fact that while the number of those employed decreased by 3,200 (from 34,550 to 31,300) the unemployment picture would have been worse without a sizable drop in the total labor force. What had been the second-largest labor market in the state in March of 2008, at 36,450, had shrunk to one lower than Washington as well as Chittenden Counties, at 34,500 – and Windsor County’s total employed, at 32,150, had moved into second place in the state ahead of Washington and Rutland.

The March 2009 numbers may shift with seasonal adjustments. But the numbers suggest that Rutland County’s concern about losing population may strengthen, after an apparent 5.3 percent decrease in the number of people seeking work, at least some of whom may have gone elsewhere in search of greater opportunities.

Behind The Scenes

Rutland County may be down, but it’s rarely out. Talk with the movers and doers and it quickly becomes clear that hard times aren’t taken as a fact of life, but as a reason to work smarter as well as harder.

In the manufacturing area, for instance, one of the year’s big disappointments was the bankruptcy of Vermont Wood Energy Corp, headed by Luis Algarin, which had planned to acquire the North American rights to manufacture Maxfire pellet stoves. Algarin initially said that within five years, the pellet stove plant could employ 500-600 people.

Then Algarin said he would start a pellet mill, and started selling Pennsylvania pellets out of the former GH Grimm maple equipment facility. He talked about possibly acquiring the former Vermont Tubbs furniture plant in Brandon or the former MetroGroup mass mailing building in Rutland.

In the end, it all went “up in smoke,” as the Rutland Herald put it, and people who had preordered pellets were only reimbursed through the terms of the bankruptcy settlement.

But Jamie Stewart, executive director of the Rutland Economic Development Corporation, said a new effort by a stronger company is seeking to put a pellet mill in an Airport Industrial Corporation building that used to be a pallet manufacturing facility. (Algarin tried to acquire this, but there were problems in the negotiations with owner Kurt Belden and it never came about.)

In Brandon, meanwhile, Town Manager Keith Arlund said they have talked with a number of potential buyers for the Tubbs plant (which is so big it took up most of what was expected to be a more diversified Brandon Industrial Corporation business park). One company in particular has emerged as a more probable buyer, and talks with them continue, he said.

Stewart, who came to Rutland County this year from a similar post in Addison County, said that he has been impressed with the way area companies are handling the downturn. Several “saw a good opportunity to do workforce training,” he said. “I think in the long run, we’re going to be in good shape.”

The region is also looking to develop new kinds of businesses that build on the computer revolution and the new concern for sustainable operations, Stewart said. In attracting or keeping such businesses, Vermont’s reputation for environmental quality “gives us an edge,” he said.

“This part of Vermont has always been good at producing entrepreneurs,” Stewart said.

Among his allies in moving into the new environmental era are the activists in furthering “the creative economy.” It’s not such a mismatch when one learns that the group brainstorming creative goals for the Rutland area chose to make sustainable development one of them, along with more arts-oriented aims.

Carol Tashie, who coordinates the sustainable economy group with James Sabataso, said they realize they have to make the economics work for environmentally sound practices to endure. An example of how they have tried to assist is the Bag the Bag campaign: getting people to use fabric bags (including 200 handed out on Earth Day after a student Sew-In) to save merchants the 5-6 cents they have to pay for each plastic bag. That’s why some stores have offered rebates for reusable bag use, and have sold such bags for a dollar or so, she said – but not as nice bags as the 1,500 with a new Rutland logo that their group brought to the Mayor and Aldermen.

Tashie said Mayor Christopher Louras deserves kudos for his understanding that sustainability can be an economic driver. Likewise, she praised Mark Foley, Jr, the latest generation of a family that owns many landmark downtown properties, for his backing.

Tashie also helps to put on Solarfest, which for 15 years has been bringing people to enjoy a music festival and to take workshops of renewable matters. This year there will be 95 workshops over three days – and Rutland County will be making a strong pitch to the entrepreneurial leaders of many of the workshops to locate or expand their enterprises in an area with an environmentally themed college (Green Mountain College, which is about to add a wood-chip boiler to their power plant), a city that has connections as a branded theme (Rutland City), and like much of Vermont, a strong connection to the land through farming.

Dairying may not be what it used to be in Rutland County, but Tashie said those oriented toward sustainability see agriculture as a major long-term component of the economy. She urged anyone interested to log onto www.sustainablerutland.org to learn more about the year-round farmer’s market, localvore food movement, and more.

Geographic Monopoly Board

As is often the case, there are major strategic efforts under way that could have important effects on Rutland County’s economy.

Developer John Kalish this spring received Act 250 approval for The Commons, his name for a proposed 82,000-square-foot shopping center along Route 7 south of the Green Mountain Plaza and roughly across the highway to the west of the Diamond Run Mall. Actual construction depends on pre-leasing space to anchor tenants – Best Buy and Barnes & Noble have been mentioned – but there is some doubt in the community whether Kalish can attract such retailers with 10 spaces vacant in Diamond Run.

Interviewed, he insisted that the economic study he had done showed the new stores would attract more shoppers to Rutland rather than decimating downtown – and the Act 250 Commission agreed. They also approved the 20-acre site despite the existence of nearly five acres of prime agricultural soil, concluding it was in parcels too fragmented to be of use to any commercial operation. Tashie said that land could have been used for local food production – for community gardens, if nothing else.

For the downtown area, one of the great hopes had been that the Vermont Railway railyard could be relocated, freeing up space for industrial and commercial development. Several plans for doing that have met insuperable obstacles – going north because that would mean taking Rutland Town houses and going south to Route 4 (with a new truck route into the city) because of wetlands.

But Tom Macaulay, who heads the Rutland Redevelopment Authority (the economic development arm of Rutland City) said there is a new plan that could work. It would mean dropped the idea of moving the railyard and creating the truck route, but it would open land for development south of the railyard, at a third less cost that the previous southward plan.

No construction is likely for at least two years, Macaulay said, but the RRA is now converting a previous Environmental Impact Statement into an Environmental Assessment so the new proposal could go through the permit process. It would involve closing Park Street at the railroad tracks and building out Randbury Road as an access to the Vermont Achievement Center, the neighborhood to the west on Park Street, and so on – but the chance to add sizable employers would be worth it.

If Kalish was hoping that shoppers would come from the Killington Resort, new initiatives may influence that possibility. Killington’s owner, the S & P Land Company, has begun active preparations for putting their master plan concept of a slopeside village into the construction process. The town of Killington, meanwhile, has begun vigorous economic development activities of its own, including development of a Killington “brand” that would help to differentiate it from the resort as well as attract other types of business.

Remember The Spartans

For some, all this will be secondary to the start of Castleton State College’s first football season this fall. Perhaps it is appropriate that the county’s first college gridiron team will be the Spartans, the ancient Greek city of Sparta having given its name both to lean “Spartan” conditions and to a “with your shield or on it” determination to surmount all obstacles. And the Spartans led the Greek forces at the Battle of Thermopylae, “used as an example of the advantages of training, equipment, and good use of terrain,” as one account puts it – a fair description of what supporters hope will become the Sustainable Regional Rutland County Economy.

Ed Barna is a freelance writer from Middlebury.