Editor’s note: Jon Margolis is VTDigger’s political columnist.
That’s some economic development project they announced up in the Northeast Kingdom the other day.
Hundreds of millions of dollars to be invested. New hotels, ski lodges, shops, offices, and apartments to be built. New factories to open. A cityscape transformed. An airport improved, expanded, and – who knows? –maybe even one day bringing commercial flights to the Kingdom.
And best of all, jobs. Thousands of jobs for the least prosperous area of Vermont, the one with the state’s highest unemployment rate (6.7 percent in August, compared to 5.0 percent statewide). One estimate was 10,000 new jobs.
What’s not to like?
Not much, apparently, because almost everybody seems to like it. Both statewide and in the region, Democrats and Republicans, businesspeople, educators, and editorial writers cheered the announcement by Bill Stenger, co-owner of the Jay Peak resort and driving force behind the development plans.
Well, there was a little unease expressed at the outset by the Kingdom’s veteran state Sen. (and now Republican candidate for auditor) Vincent Illuzzi, who said, “It almost feels a little overwhelming. Can the area absorb that much change?”
Where people gather – on sidewalks, in  coffee shops and taverns, at Post Offices – some in the Kingdom are pondering Illuzzi’s question: Can the area absorb that much change?
No organized opposition to the proposal is visible. But where people gather – on sidewalks, in coffee shops and taverns, at post offices – some in the Kingdom are pondering Illuzzi’s question: Can the area absorb that much change? Does it have enough doctors and hospital beds, teachers and classrooms, to accommodate the influx of potentially thousands of new residents? Will all those additional cars pollute the air or clog the highways? Will the new residents trigger construction of suburban sprawl housing developments and strip malls, forever changing – many would say ruining – the unique character of the Kingdom?
And whatever the answers to those questions, did Stenger and his allies even try to find them before announcing the development package on Oct. 4? If studies were being conducted, they were being conducted out of the public eye.
Behind all these questions was a more basic challenge. This project is effectively an act of central economic planning. Not in the old Soviet manner, to be sure. This is private enterprise planning. But it has lots of government subsidy, both direct and indirect, and it is likely to change the Northeast Kingdom. Hence the question: Who elected Bill Stenger to transform the region’s economy and society?
“Nobody,” said Bill Stenger, who then quickly added that he had regularly been in touch with elected and appointed officials – educators, economic development planners, health care administrators, and more, telling them what he intended and listening to their concerns. And when he announced the project, he did so with the enthusiastic backing of Gov. Peter Shumlin, Sens. Patrick Leahy and Bernie Sanders, and Rep. Peter Welch, all of whom were elected.
So the answer to the second question – whether Stenger and his associates tried to get the information – is a qualified yes. They may not have undertaken a detailed demographic/economic study of Orleans and Caledonia counties. But they talked to the people who have much of that information, kept them informed, and sought their input.
“Bill Stenger and I have been in regular communication,” said Steve Patterson, the head of the Northeastern Vermont Development Association. “I didn’t know every detail of the plans. But I had a general idea.”
That does not prove that the answer to the first question – can the Kingdom absorb the change? – is also yes. Here the more likely answer is: It depends. And perhaps depends on how wisely and how actively local authorities plan to manage the growth.
In much of the Kingdom, though, “planning” is a four-letter word.
Or as Brian Shupe, the executive director of the Vermont Natural Resources Council, diplomatically put it, officials in the area have been guided by “a strong sense of local control that has discouraged a lot of land use regulation or forward-thinking planning on how to shape growth.”
Stenger said he was reluctant to go public about his early planning until Congress reauthorized the EB-5 program, the mechanism by which he plans to finance all this new construction. That’s the system in which foreign investors get U.S. residence status for a $500,000 investment that creates or preserves 10 jobs that last at least two years.
By the time Congress extended the program last month, Stenger and partner Ariel Quiros were ready to announce their plans, based on getting $500 million in EB-5 investments.
The 10 jobs-per-$500,000 requirement under EB05 can include both direct and indirect jobs, including “induced” jobs.
That’s where the 10,000 jobs figure comes from, and that’s the figure behind some of the unrest. Ten thousand workers and their families streaming into an area now home to not quite 60,000 would be more than just a transformation. It would be an upheaval.
That’s not the way it works. First, not all those jobs are going to be in the area. As Stenger explained (an explanation confirmed by officials of the U.S. Citizenship and Immigration Services) those 10 jobs-per-$500,000 can include both direct and indirect jobs, including “induced” jobs.
Part of the new plan, for instance, calls for construction of a hotel and conference center in Newport. The contractor for that job could be from out of the area or even out of state, but many of its employees would count as jobs created (or extended) by the construction in Newport. If that contractor’s extra work meant it would have to buy a new truck, some of the workers who produce that truck might count, too, even if the truck is manufactured in Detroit.
That number – 10,000 – is reached not by counting actual workers in Vermont, but by economic modeling. Don’t expect 10,000 workers and their families to be streaming into the Kingdom.
Besides, Stenger and other local leaders hope that many of the new jobs will be filled by people who already live there. According to the most recent Labor Department statistics, there are only about 1,000 unemployed people in the Newport area. But that doesn’t include those who have stopped looking for work.
Patricia Sears, executive director of the Newport City Renaissance Corp., said she and others had been working for years with the vocational educators at North Country High School on “workforce development” so that when new jobs do open up, they can “more easily be filled by folks who are here.” Those folks, she said, include people who have “grown up on farms and understand how machinery works,” giving them the skills needed to work at some of the new projects.
Unlike so many modern development projects, this one is – at least on its face – anti-sprawl. Most of the projects are right in the small city of Newport, which despite its natural advantages – it’s on the southern shore of Lake Memphremagog – has been in the economic doldrums for years. As Stenger noted, most of the Newport projects – the hotel/conference center, two factories, a rebuilt city block of stores, offices, and apartments – will be “within walking distance.”
That’s why the project has at least tentative support from environmentalists such as VNRC’s Shupe and Paul Bruhn of Preservation Trust of Vermont.
“Bill (Stenger) clearly wants a bright strong town in Newport and that would be a very good thing,” Bruhn said. “That direct development will be an enhancement.”
The bigger challenge, Bruhn said, is whether “the secondary growth can be also managed and targeted and planned and developed in a way that fits in with the basic characteristics of the Kingdom. That’s going to take some work.”
Some of that work is going on. Stenger met last week with Robert Kern, the superintendent of the local school system, and has met in the past with Claudio Fort, the president of North Country Hospital. Fort said he and Stenger have plans to create a “medical clinic that would be able to provide primary care” and other medicals services in Jay.
That might relieve some of the burden on North Country Hospital. But both Fort and Kern said they could not make precise plans until they get a better idea of just how many new permanent residents the new EB-5-financed projects will bring to the area. So far, they said, nobody has been able to give them an estimate.
The region would have to attract more physicians and teachers to accommodate 5,000 more residents.
Were the population to rise by 5,000, Fort said (consistent with an influx of roughly 2,000 new workers), “we would have to recruit probably a couple more primary care physicians.” Kern’s situation is more ambiguous. Some classrooms in his district’s 12 schools have plenty of room. Others are “challenged for space,” and under some circumstances, the district might have to hire more teachers, he said.
These are problems, but also opportunities. Recruiting physicians and teachers to the Kingdom should be easy, and would bring reasonably affluent professionals who would pay taxes, eat in restaurant, buy at the local shops.
The bigger challenge is: Where would those new workers and their families live? In the villages and on the farms or country homes that now typify the Kingdom? Or in a new collection of suburban subdivisions sprawled along Routes 5 and 105. This is the “secondary development” quandary that concerns the VNRC’s Shupe, Bruhn of Preservation Trust, and many in the Kingdom. Already, noted Shupe, the Derby Road east of Newport is “strip development unfolding before our eyes,” and worries that the EB-5 projects could lead to more of it.
In which case, the Northeast Kingdom would become … well, it would become something else. Still not a bad place to live and raise children. As the NVDA’s Steve Patterson noted, many in the Northeast Kingdom can’t afford to enjoy its cherished quality of life because they can’t get a good-paying job. Perhaps some suburban sprawl is a reasonable price to pay for more economic opportunity.
But it won’t happen if Bill Stenger can help it.
“I don’t want to see that,” he said. “We’re going to do everything we can to avoid that.” Part of his plan, he said, is more “affordable housing in the city limits.”
Based on his track record, Stenger just might be able to pull that off. If voters did elect leaders to transform their region, Stenger might well win that election, and deserve it. He’s not only energetic and public-spirited; on the evidence at hand – the recent Jay Peak expansion, the artist conception of the new “Renaissance Block” in Newport – he appears to have taste.
But suppose another kind of powerful, energetic leader were to play a similar role elsewhere, someone who envisioned more housing subdivisions, big-box stores, shopping malls with multiplex theaters and chain restaurants, not out of greed, but because he or she preferred that kind of development. Many people do. Could that leader impose that kind of development on an area of Vermont?
No, said Stenger, at least not without “community support,” which he does not think such development would get. “I know my community and I listen,” he said.
So it seems. It will be interesting to see if he can pull it off.