Editorial: Upper Valley Economy Is Vulnerable to Larger Forces

Larger Forces Affect Upper Valley

Monday, May 23, 2016

It’s generally accepted that the Upper Valley is sheltered from severe economic headwinds by the presence of two large, stable employers. Indeed, it’s hard to imagine a scenario in which there would be a sharp drop in demand for the services provided by the Dartmouth-Hitchcock health system and by Dartmouth College. After all, people will continue to get sick and an Ivy League education will remain highly prized for the foreseeable future.

Nevertheless, a trio of stories in the business section of this week’s Sunday Valley News served as a useful reminder that despite its good fortune, the Upper Valley economy does not operate in splendid isolation. Many of the same forces that shape economic activity elsewhere are also at work here.

One article reported that Quechee Mobil Mart, a fixture at the interchange of Route 4 and Interstate 89 southbound in Vermont, had been forced to file for Chapter 7 bankruptcy, which is generally a prelude to liquidation of a company’s assets. Owner Sheryl Trainor, who had operated the gas station and convenience store from 1995 until it closed earlier this month, pointed to several factors in its demise: the difficulty of hiring and retaining employees in an area with such low unemployment; customers’ increasing reliance on credit cards to make purchases and the resulting financial burden on businesses of the “swipe fees” charged to them by credit card companies; and Vermont’s business climate. In Trainor’s analysis, single own-er gas station and convenience stores are endanger-ed; only corporate giants will be able to succeed, by taking advantage of economies of scale.

A second story reported that the owners of the 92-acre Twin State Sand and Gravel parcel off Route 12A in West Lebanon, where a development is planned, are trying to sell the site for $15 million. Although the permits are in hand for the project, which would consist of 660,000 square feet of retail, office and industrial space, an estimated $12 million of infrastructure improvements are required. Bud Ames, co-owner of Twin State, says that is beyond their means. Although the site is desirable because of its location close to the city’s commercial strip and the interstate, and because redevelopment of the site would be preferable to building such a project on open space, it’s unclear whether either the city or another developer would be eager to step in and undertake infrastructure improvements of that magnitude. There’s also a question of whether in a low-population-growth area such as the Upper Valley, there would be sufficient demand for the varieties of space contemplated.

The third story discussed home sales, which are in the doldrums, according to a biannual report sponsored by the Upper Valley Housing Coalition. It found falling sales prices for existing homes during the first quarter, along with shrinking inventory (although there were also some bright spots, including that homes were selling more quickly). One of the authors of the report, Ned Redpath, owner of Coldwell, Banker Redpath & Co., pointed to stagnating middle-class wages as one possible reason: It’s hard for people to put aside enough for a down payment. “Everybody says the economy is strong, but it’s nowhere near as strong as they say it is,” Redpath said.

It’s risky — and unwise — to draw broad conclusions from circumstances that may in each case be unique, But taken together, these stories do suggest that the Upper Valley, despite its strong employment foundation, experiences the same economic challenges and has some of the same vulnerabilities as elsewhere in America. Growth and prosperity cannot be taken for granted. Many conditions are required, including an increasing supply of trained and willing workers, fair compensation for them, housing they can afford, and educational opportunities for them and their families. Those are priorities that need to be acknowledged and attended to in both the private and public sectors if the Upper Valley is to continue to thrive.