Franklin County economy weathers long, hot summer

Franklin County has been doing relatively well through the last year, weathering the recession with few job losses. But the last few of months have brought several pieces of bad news, most recently the layoff August 23 of about 75 workers at Wyeth Nutritionals Inc in Georgia.

These are high-paying jobs and will be difficult to replace, said Marilyn Savoy, of the Workforce Investment Board. Dana Kittell, vice chairman of the. Franklin County Industrial Development Corporation said he expected the impact of these lost jobs will ripple through the Franklin County economy and add to the general sense of uneasiness.

According to a Wyeth spokesperson, the plant, which operates 24 hours a day, is cutting its production schedule from seven to five days a week. The plant produces baby formula and other nutritional products, and with these latest layoffs, will have reduced its workforce to just 300.

Added to several other recent blows, this shows that Franklin County is certainly not insulated from the broader national and international economy. This brings to about 280 the number of jobs lost in Franklin County from layoffs since the beginning of the year.

Fonda Paper announced earlier this year it would cut its workforce by about 80, but at least some of that reduction has come through attrition rather than layoffs, said Tim Smith, executive director of the Franklin Industrial Development Corporation. Only about 25 Franklin County residents lost their jobs at IBM in Essex junction when that company laid off nearly 1,000 employees, Smith said.

The early August announcement that all Ames stores are closing means the loss of 34 full time and 41 part time jobs in Franklin County. At the beginning of the summer Barry Callebaut laid off about 25 people.

Still with the state of Vermont recording well over 5,000 layoffs in the last 18 months, Franklin County has generally held its own through the recession and there are number of positive signs - that going forward.

"We've been impacted, but I don't think to the same extent as we have in the past," during previous economic slowdowns, Smith said.

There are several factors that may have helped Franklin County weather a weak economy. "Part of it is diversity of manufacturing and food productions and distribution centers," said Smith. "We're really upbeat, because there's a lot happening here."

Ben & Jerry's Expansion

Less than a week after the negative news from Ames and then Wyeth, Ben & Jerry's broke ground on a $15 million expansion to add both production space and a distribution center to its existing seven-year-old facility in the St Albans Town Industrial Park, and increase employment here by about 55.

This project does, however, come at the expense of both the Springfield and Bellows Falls plants, which are both slated to close early next year. The Springfield facility has been manufacturing bulk tubs and stick novelties, while Bellows Falls served as a distribution center. More than 120 employees will loose their jobs at the other two locations, and the company plans to offer some of those workers an opportunity to relocate to St. Albans.

About $6 million will be spent on the addition to the manufacturing space and when it is fully operational, the St. Albans Ben & Jerry's plant will become the company's principal production facility, raising its capacity from 10 to about 12 million gallons of ice cream annually, both pints and bulk tubs.

Adjacent to the 110,000 square foot production facility will be a new 90,000 square foot warehouse and distribution center, which will be operated in conjunction with Atlas Cold Storage out of Toronto, Canada. The cost of this part of the project will be about $9 million, and together the two projects will make St. Albans Ben & Jerry's largest manufacturing and distribution center. The company has said this consolidation will help improve its competitive position.

This is all good news to the St. Albans Co-op, which takes in much of the milk produced in Franklin County and is the exclusive supplier to Ben & Jerry's, selling about a third of its production to the ice cream maker.

Other Bright Spots

Another expanding business here is Eveready Battery, located on Route 7 North in St. Albans. The company has added about 25 employees since the beginning of the summer part time, and is steadily hiring in an effort to boost production of its highly successful "e2-lithium" battery. These batteries outlast traditional alkaline batteries by about five times, and are in particular demand for energy-hungry devices including PDAs, like the ubiquitous Palm, and digital cameras. Only the St. Albans plant produces Energizer's AA lithium batteries. This 186,000 square foot plant also produces a wide variety of economy and novelty flashlights.

Also growing is Swanton's Vermont, Precision Tools. The company recently received an Act 250 permit to build a $4 million 87,000 square foot manufacturing plant just off Robin Hood Drive in Swanton. This will allow it to consolidate under one roof operations that are now scattered in three separate Swanton Town Industrial Park buildings. The project is expected to add up to 35 new jobs for the precision tool and gauge maker, although some of those positions will be filled by employees from its Colorado plant, which is has been closed as part of this consolidation. This project will also provide VPT with room for future expansion, and offer ready-to-use space for some smaller companies right now. Since it does not need all this space immediately, the company plans to lease about 25,000 square feet to one or more other businesses.

Employment is also expected to continue increasing at the Immigration and Naturalization Service offices here, and the INS could hire as many as 200 people before the end of this year. "I understand they expect to be adding as many as 300 position over the next couple of years," said Chad Tsounis, executive direction of the St. Albans Area Chamber of Commerce.

Husky, located in Milton, attracts many of its workers from Franklin County and it is hiring said Savoy. And the Smugglers Notch resort has indicated it will send a van over to Franklin County if there are enough people who want to

work at the resort as housekeepers and other seasonal positions, she said.

On Other Fronts

There are a number of construction projects underway or in the planning stages. Currently under Act 250 review is proposal by Mylan Technologies to add 6,700 square feet of additional space to its existing St. Albans warehouse. Mylan makes pharmaceutical products such as the transdermal patch. Elsewhere in the county, the town of Sheldon is spending $213,000 on improvements to its sewage system.

Retail business looks good too. "If you look at our downtown (St. Albans), we've had a decrease in vacancies and a number of different new shops and eateries," said Tsounis. Both the Highgate Shopping Plaza and the St. Albans Shopping Center have seen new businesses, he said. And he said it appears the New England Federal Credit Union may be moving into a location just off Route 7 in St. Albans.

Even news like the closing of the Ames stores does not discourage Tsounis. "That's a good location," he said of the Ames store in the Highgate Commons shopping Center. "If Ames moves out, I don't think it would take too long before some other major national department store moves in."

During the last year when unemployment rates have moved up in most parts of the state, the St. Albans City's jobless rate fell from 3.7 percent to just 2.9 percent in July. This demonstrates very significant progress since 10 years ago, when the unemployment rate here was 8 percent.

St. Albans City also has embarked on the process of becoming a designated downtown that will make it eligible for state grants and incentives for renovations and upgrades, said Tsounis.

So while there have been a few pieces of bad news recently, looking back over the last year, "I'd almost say we don't have to emerge from the recession," said Tsounis. "I almost think we've been riding the top of the wave."

Marilyn Savoy of the Franklin Grand Isle Workforce Investment Board agrees, and she does not see the closing of Ames as a permanent loss.

"It is our hope that another large retailer will move in there," she said. The location, she pointed out has "great access across the border" and there is an active local economy that will support it as well.

Dairy

Franklin County continues to be the largest dairy county in the state, producing more milk than any other state in New England. That means that a good portion of the county's economy rises and falls right with milk prices. Last year, 2001, was one of the best years for dairy in recent memory. Milk prices were high and most farms posted good profits.

According to the recently released Northeast Dairy Farm Summary, milk prices in 2001 were 9 percent above the five-year average, and dairy consumption was strong. The average dairy farm earned $384 in profit per cow, a figure that was almost half again as much as the five-year average, adjusted for inflation.

But this year the story is a lot different. Milk prices, which had been around $17 per hundredweight, began dropping in December, and the decline has continued. The Northeast Dairy Compact, which had milk processors paying dairy farmers a set minimum for their milk, expired last December. It has finally been replaced with a federal subsidy program that many area farmers are viewing with some angst and distaste.

The new Milk Income Loss Contract will provide federal payments to cover the shortfall in milk prices. Unlike the now defunct Dairy Compact where processors and, ultimately, dairy consumers paid, with this program it's the American taxpayer who is footing the bill.

Registration for the program began August 13th, and there will retroactive payments of up to $25,000 per farm back to December 1 of last year. Officials projected Vermont dairy farmers would receive about $9 million under the program this year, and about $46 million over the next four years. The program provides for direct payments to dairy farmers anytime the price of milk drops below $16.94 per hundredweight. The current price is below $12.

The county has about 500 dairy farms. Agriculture, which also includes maple production and a number of other products, is part of the all-important diverse Franklin County economy.

Strength from Diversity

Smith said the biggest strength of the county is this very diverse economic base.

In his letter to FCIDC members earlier this year, Smith wrote, "I believe the average Franklin County resident has no idea of the variety of value-added products being produced right here in our own back yard." The county's economy is not dominated by any single industry.

Another strength, said Tsounis, is a sustainable rate of growth. "When development happens here, it happens at a sure, steady pace, no so fast that there's overkills, and not so slow that it discourages business."

Room for growth in Franklin County

As the economy picks up, Franklin County is poised for the next expansion, with no shortage of inventory in potential business locations. That will be important if the county is to continue its record of job growth, particularly in the industrial sector.

In the 1990s, the country saw the creation of about 2,900 jobs. For much of the last decade Franklin was the only county in the state to show growth in manufacturing jobs, mostly with smaller companies. During the same period the average annual salaries in the Franklin and Grand Isle region increased from $18,302 to $24,097.

In recruiting new businesses, Franklin County officials report that some companies want land where they can build, while others want a building where they can quickly set up operations.

This county has both available. When the new Vermont Precision Tools building in Swanton is completed, there will be about 25,000 square feet of space there available for lease to one or more tenants, said Tom Smith, executive director of the Franklin County Industrial Development Corporation.

There will also be industrial space available in the buildings where the company is now operating. Smith said the FCIDC is also considering erecting a new multitenant building at another location.

Newly developed is the Enosburg Industrial Park and the Enosburg Development Group are actively seeking tenants, Smith said. The development group has said it hopes to have an agricultural focus in the new park, attracting businesses that will complement the area's all-important dairy industry. The new park has 43 acres, and up to nine lots for industrial development.

There is also a good inventory of available land in other industrial parks around the county. There are two lots, one three acres and another almost five acres, available in the Georgia Dairy Industrial Park. Vermont Fasteners, Wyeth and MED Associations are located there.

Also in Georgia is the Arrowhead Industrial Park, permitted for 13 lots, which has two lots still available. Among its existing tenants are BD Press, Yankee Corporation and Gardener's Supply. The Morse Industrial Park at Exit 18 in Georgia is a new, 11-lot park that has all of its permits and lots are now available for sale or lease.

The Richford Business Park, home to Kaytec, Inc, has five acres remaining for development. The town of Richford also has another 50 acres zoned for industrial use.

The Franklin Business Park East, located just 10 miles south of - the Highgate Springs border crossing, has seven lots still available. The Franklin Business Park West is 150 acres on the east side of U.S. Route 7 north of St. Albans, and has several lots still available.

There are also several privately owned parcels that could be used for industrial development, like the Aldis Street, Railroad property, just west of the St. Albans Co-op processing plant. This land, totaling 11 acres, is owned by New England Central Railroad and is available for lease.

The last couple of years have been slow in terms of recruiting new businesses from elsewhere to relocate in Franklin County, Smith said, but, "We have held our own" through the recession. As the economy picks up steam, he expects to see renewed interest from businesses that want to establish operations here. "We're in preliminary discussions with several companies now," he said.

Copyright Boutin-McQuiston, Inc. Sep 01, 2002
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