Traditional industries drive success in NEK

Vermont Business Magazine, Aug 01, 2005 by Brush, Cassandra

With a healthy dairy industry, shrinking unemployment, and two ski areas expanding and creating year round markets, the Northeast Kingdom continues its trend of slow and steady growth.

Agriculture abounds in Vermont's most rural comer, and when it's doing well, so is the rest of the economy. According to farmers and the department of agriculture, dairy is faring well these days.

"The dollar's up because the price of milk is so good right now," said Agency of Agriculture Deputy Secretary of Agriculture Louise Calderwood. (see sidebar). Calderwood connects the strength of dairy to the rest of the economy. That connection is bears out, in the state's unemployment statistics.

The unemployment rates in Essex, Orleans and Caledonia counties the counties that comprise the Northeast Kingdom - lowered half a percentage point between. May 2004 and May 2005, the latest statistics available from the Vermont Department of Employment and Training. The numbers dropped to 3.8 percent in Newport from 4.3 last year, and were down to 2.8 percent in St. Johnsbury from 3.3 percent last year.

The numbers indicate what economic leaders have been repeating for a while in the Northeast Kingdom: the economy in', this least populated area of the state is gradually improving.

"Slow steady growth is what it's all about," said Steve Nichols, President of the Lyndon Area Chamber of Commerce. As evidence, Nichols pointed to indicators such as several new businesses going into the St Johnsbury-Lyndonville Industrial Park. Also, Greenfield Industries, the machine and fine-tooling company that has been the industrial base in Lyndonville for 25 years just added back its third shift.

Summer Tourism Is Hot

Long known for winter tourism with it's interconnected snowmobile trails and two ski areas - Burke Mountain and Jay Peak - the Northeast Kingdom is reinventing" itself as a summer tourist attraction as well, said Nichols. However, the area still relies on its winter visitors. And those are increasingly coming in on snow mobiles.

With two bad winters in a row making the ski industry "flat" in the Kingdom, Nichols said snowmobile visitors finally surpassed the number of ski visitors last year.

"The amount of snow mobile people has increased exponentially year by year," he said. "They seem to have a tremendous amount of disposable income, but the lack of snow in early winter had a tremendous impact that hit everybody."

With that said, Nichols added that summer bookings are up. He said an anecdotal survey of area tourism-based businesses showed that bookings this year have increased since 2004.

With the change in types of tourism in the Northeast Kingdom comes a change in eateries.

"There a brand new higher end market which we haven't had in this area," he said, pointing to Bellas Market and Cafe in Lyndon, which sells higher end organic produce and "things from all around the world that you can't find in the area right now."

"I don't think anyone would have conceived of opening one five years ago, but demographics are changing and there's a positive belief that even in a slow economy, we've seen slow steady growth over the past decade," Nichols said.

Burke Expands

David Gwatkin is very upbeat about the Northeast Kingdom economy. As marketing director at Burke Mountain, and the President of the Northeast Kingdom Travel and Tourism Association, he sees a real estate market that is booming and enough winter tourism to justify a major expansion on the mountain.

Burke Mountain is installing a high speed detachable quad chair to replace its old fixed cable chair, which he said was hard for beginners to use.

"A lot of folks are nostalgic (for the old lift)," Gwatkin said, "Season pass holders don't want a high speed lift because all it does is move the crowd from the bottom of the hill to the top of the hill so the trails have more people on them. But as a business ... the market expects a high speed lift."

Burke Mountain is also building condominiums on slope, which hasn't happened for over 15 years according to Gwatkin.

"We've had this forward momentum here at Burke, there have been some negotiations between the current owners and an outside entity," Gwatkin said. He would pot elaborate more on the matter, except to explain that after the 2000 sale of Burke Mountain to Burke Mountain Ski Academy, an the entity Burke 2000 was created to run the mountain.

"The Academy just wants to run the school, not a business. From the beginning Burke 2000 has been looking for a partner.

Gwatkin said real estate has been exploding nationally and locally in

the past year. He said a 9/10 of an acre lot on slope sold for $31,000

late last fall, an amount he called "Play money" to most other ski

areas. However, the adjacent lot of the same size sold for $93,000 in

March.

"It's increased three times in six months," he said. "There's some demand monster driving this."

Gwatkin said he canvassed businesses in the region for a study on bookings and tourism for the summers of 2003 and 2004.

"Tourism was more than double that of the rest of the state, even if you control for that one time event the Phish concert in Coventry last August, the three county region in the kingdom still saw double the tourism of the rest of the state. We're moving ahead."