Region diversifies as layoffs alter traditional economy

Vermont Business Magazine, May 01, 2003 by Edelstein, Art

A mixture of caution, the result of concern about current economic conditions, is laced with optimism for the future as Windham County heads into late spring and summer. Although there is nearly one million square feet of empty commercial/industrial space in the county, the largest vacant amount in many years, occupants are being found and that space will diminish say local experts. While retail sales generally are in the doldrums, the result, say retailers, of a stagnant national economy and uncertainty with a war raging in Iraq, overall, the retail sector here seems vibrant.

While two large employers, SCA and Northeast Cooperatives have recently left the county, and nearly 400 workers have lost jobs in recent months, unemployment rates remain relatively low.

Countering the economic negatives are new construction along the commercial strip of Putney Road (Route 5) in Brattleboro, few vacant storefronts in Brattleboro and Bellows Falls, several healthy large manufacturing businesses employing many workers, and resort-area construction.

In all, while the short-term economic picture is murky, local business leaders say conditions here are generally healthy. As Richard Ewald in Bellows Falls said, diversification in the county is its strength. "We don't have all our eggs in one basket."

Current Economic Picture

"The economy has slowed down. The majority of companies are in a holding pattern waiting for the next six to 12 months," said Bill McGrath the outgoing head of the Brattleboro Development Credit Corp.

McGrath has served in his position since 1995, but left on April 4 to head the Rutland Economic Development Corp. He takes over for David O'Brien who became state Commissioner of the Public Service Department.

McGrath sees the weakest sector of the local economy as the machine tool industry, an industry long in decline. But, he notes, local companies may regain some strength as the nation's armaments industry gears up for replacement parts after the Iraq war.

McGrath points to the local food distribution sector as one that continues to be healthy even with setbacks. C&S Grocers, which announced last year that it would move its corporate headquarters to Keene, NH, remains the largest privately owned business in Vermont with $11.5 billion in annual sales. While the area was hit by the closing of the Northeast Cooperatives in a consolidation with United Food that moved it to Chesterfield, NH, McGrath points out that the company's sales were a much smaller hit for the local economy.

Food distribution, contends McGrath, is important to Windham County. Located as it is with easy accessibility to New England, New York and Pennsylvania, the county will continue to be a distribution hub. Coupled with food distribution is specialty food production.

"There will be an increase in specialty food companies and most are very small," said McGrath. Current examples of small companies doing well are Vermont Gold Maple Products, Sidehill Farms and Istanbul Kitchens. "You will see an increase In these businesses," he predicted.

In 1998, Vermont Gold moved its operations to the Cotton Mill, the incubator building owned by BDCC that is currently at 99.7 percent capacity. Today, Vermont Gold occupies 10,000 square feet of production space and has 18 employees. Annual sales are $1.5 million.

McGrath said the county's lumber companies are strong with Cersosimo Lumber leading the way. Allard Lumber, the other big lumber company in Brattleboro, filed for Chapter 11 bankruptcy protection for purposes of reorganization in April.

Cersosimo Lumber has remained healthy relying primarily on the furniture industry for the lion's share of its product sales. The family-owned company, founded in 1947, has annual sales of $35 to S40 million according to company vice president Gary Carrier.

The company employs 250 at its various sawing plants, grading stations, packing warehouses and loading docks and office. The weekly payroll here is $150,000.

Cersosimo is processing 40 million board feet of lumber each year, the equivalent of 10,000 truckloads of log-length lumber. Each day 1,500 logs are processed in the mills. Even with the economic downturn of recent years, Carrier said the company "has kept a steady business." He sees the future "looking good."

Another healthy and growing manufacturing sector notes McGrath is optics. He points to Omega, Chroma, Janos,

Vermont Photonics and Kill Morgen as optics manufacturers who made the county home.

These companies will attract even more optics manufacturers, he predicts, because, "they know there is a trained workforce here."

During McGrath's tenure he helped attract 37 out-of-state businesses and 700 new jobs. The Cotton Mill, which he oversaw, is at near capacity with 47 tenants.

He said he has helped turn around the loss of the Quebecor Press and its empty warehouse facility has seven occupants with more to come. As he ended his tenure with BDCC, six new companies were on the verge of relocating here with the possibility 65 new industrial jobs.