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Middlebury business outreach at crossroads as development fund up for renewal

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Posted on September 29, 2016 |
By John Flowers



JamieGauchier9872.jpg

MIDDLEBURY — Almost four years into its five-year trial, the Middlebury Business Development Fund (MBDF) is struggling to achieve its goal of bringing substantial new businesses and jobs to town, in spite of the efforts of its energetic executive director.

That was the consensus opinion last week among several local officials and entrepreneurs who lobbied for creation of the MBDF back in 2012. It’s been a joint effort by the town, Middlebury College and the local business community to bring new enterprises to the community and help existing firms grow. The record shows that while the MBDF and its chief administrator, Jamie Gaucher, have courted a diverse crop of prospects, organizers’ original hopes of landing some businesses with 40-or-more employees remains an elusive goal.

“We know Jamie has worked energetically to try to bring jobs to Middlebury and I think all of us, Jamie included, are disappointed with the results to date,” said Dave Donahue, special assistant to Middlebury College President Laurie Patton.

“I will say that we knew when we took this approach that it would be a challenge, but that the only way to test a proposition such as this one is to try it,” Donahue added. “We have no regrets about doing so.”

Area MBDF boosters cited a still-thawing economy and the challenges of attracting young entrepreneurs to a rural area as among the obstacles that Gaucher has faced in his recruiting efforts. One official close to the process who requested anonymity said he had hoped to see more cooperation from the college in identifying and courting potential alumni prospects. Former Middlebury selectboard Chairman John Tenny believes the MBDF process would benefit from more exposure to, and feedback from, the public.

“I think we’re not doing enough to involve the community in the process,” Tenny said.

Specifically, Tenny thinks it would be a good idea for the town to convene public forums at least twice each year to allow Gaucher to update his activities and allow taxpayers and businesses to air their concerns and ideas about economic development.

Tenny believes Gaucher has made a good effort to recruit businesses to the area. But he said Gaucher is competing in a still-difficult economic climate.

“The economy is slow to rebound in many sectors,” Tenny said. “It’s not easy.”

David Hamilton, a member of the MBDF Advisory Board, pointed to the rigorous competition among regions in recruiting business prospects.

“Vermont does not have many of the headline attractors that drive business relocation, such as taxes or labor market factors, so a more nuanced case needs to be made, and a lot of our effort should go into cultivating growth in industries we already have,” Hamilton said. “Finally, there is an unfortunate ‘arms race.’ As an example, I have a client in Texas who's starting a business and his town, in suburban Dallas, is giving him a raft of incentives to build a business that absolutely would not pencil out as a startup in Vermont, but which will employ 30 or 40 people and attract thousands of visitors. We can choose not to compete in this game, but we shouldn't pretend it's not happening.”

MBDF’S ORIGIN

It was at their 2012 town meeting that Middlebury voters agreed to add a penny to their tax rate to annually raise approximately $72,000 to help finance a Middlebury Business Development Fund (MBDF), charged with creating “good jobs close to home” through recruiting new businesses to the town and leading a regional effort around innovation-based economic development.

Middlebury College agreed to match the town’s annual contribution toward what organizers pitched as an initial five-year term for the MBDF. Local businesses agreed to raise an additional $36,000 in an effort to produce a total annual budget of $180,000. The largest recurring annual expense of the MBDF has been the $87,838 salary of its executive director, Gaucher, selected from a field of five finalists for the job. The fund also pays for Gaucher’s travel, office supplies, loans to help business prospects get started, and resources for studies to further economic development in town.

It was in April of 2013 that Gaucher officially started as Middlebury’s first-ever “director of business development and innovation.”

Middlebury taxpayers’ current five-year funding commitment to the MBDF ends on June 30 of 2017. With that in mind, the Middlebury selectboard recently formed an MNDF Evaluation Task Group to review the track record of the MBDF and Gaucher. That panel, chaired by Selectman Nick Artim, will gather research and testimony — from residents and the business community — in anticipation of delivering recommendations to the selectboard by Dec. 1 on whether the MBDF should be extended in its present form; extended with some changes; or scuttled in favor of a different economic development strategy.

Local voters will have the final say on future local funding of the MBDF at their annual meeting next March.

GAUGING METRICS

Organizers of the MBDF set some metrics by which to measure the success of the initiative in its first year. The goal for the first year was visits from 12 “qualified” prospects, with the goal of attracting one business relocation, satellite office or one new business start in the first year. While early MBDF boosters did not expect a steady influx of businesses with 100 or more employees to replace the manufacturing firms (like Standard Register and Polymers) that closed their doors more than a decade ago, they did voice hopes of attracting some enterprises with workforces of at least 20.

Almost four years into the MBDF effort, Gaucher — by most accounts — has worked diligently in recruiting businesses and following up on leads. Gaucher invites some of these prospects to speak at the monthly gatherings of the Middlebury Business Development Fund Advisory Board. Since January, according to Gaucher, the MBDF Advisory Board has entertained such prospects as Ekopolimer, a company with the capability of turning tough-to-recycle plastics into such durable products as manhole covers, railroad ties and portable mats that will allow crews to work in areas with soft, wet soils; Tata Harper Skincare; Fairpoint Communications; Vermont Livestock; and representatives of the Vermont Green Line power transmission project.

But Gaucher acknowledged that it’s been tough to land the bigger fish.

He has compiled a list of “success stories” since he began the job — and they largely involve small start-ups to which he gave advice on locations, funding, permitting and business planning (see related article). His list of around 15 includes Full Sun, located on Exchange Street, which produces all-natural canola and sunflower oils; Seedsheet, located in Middlebury’s industrial park, which manufacturers an innovative gardening product; and Parlour, a hair styling/spa business that he helped relocate from Brandon to Middlebury.

“I think all of those demonstrate that the MBDF is capable, and headed in the right direction,” Gaucher said.

Many of the success stories are homegrown, with a handful of employees. While they are not yet major players in Middlebury’s economy, the hope is that they will mature and add workers during the coming years.

 “I think it’s still very much a work in progress,” Gaucher said. “I think Middlebury continues to grow. We are three-and-a-half years in to what was originally designed to be a five-year program, and we’re still working on it every day.”

BUSINESS FEEDBACK

The Independent reached out to some of the entrepreneurs Gaucher has assisted.

Netaka White is co-founder and head of operations for Full Sun, which also received some financial help through the MBDF.

“We really appreciated the way Jamie stepped up when we were looking for a building to become our mill for launching Full Sun's line of culinary oils,” White said. “We wanted to be in Middlebury, but were having a hard time finding appropriate commercial real estate, so Jamie helped arrange meetings with several prospective landlords. It took 10 months to get a lease from the time we met Jamie, so he saw first-hand how difficult it is to lease mid-sized buildings in Middlebury with adequate food processing infrastructure.”

He credited Gaucher for helping Full Sun leverage its investment in its property and land financial assistance to start and grow the business.

“This way, we could more affordably bring the space into Vermont Health Department and FDA compliance,” White said, “and just as importantly, the food safety improvements we leave behind on Exchange street will be there for the next food or beverage processor looking for a home in Middlebury.”

Sivan Cotel and Sas Stewart are co-founders of Stonecutter Spirits, an increasingly popular producer of high quality gin located next to Vermont Coffee off Exchange Street. Cotel said he supports the MBDF in concept, but does not believe the initiative has met expectations.

“I think it was great for the town and college to work on something as groundbreaking as the MBDF,” Cotel said. “Sadly, the execution has been less than ideal during the past couple of years. I hope the program continues, even if under new leadership.”

Cotel said he preferred not to publicly air specific criticisms about the program.

The Ekopolimer plan — if it comes to fruition — would likely be the most substantial business addition to Middlebury during Gaucher’s tenure. Middlebury College alum Caleb Rick is Ekopolimer’s point man for the potential project in the town’s industrial park, which he says could bring around 100 jobs to the Middlebury area within the next few years.

“It is because of Jamie Gaucher’s wisdom, experience, tenacity, leadership and good humor that Ekopolimer has advanced as far as it has,” Rick said.

Gaucher, during his regular reports to the Middlebury selectboard, has also cited his work in promoting various infrastructure improvements and projects that were initiated prior to his arrival. They include plans to put in a retail/residential/office development on town-owned land behind the Ilsley Library (the so called “EDI” project); an effort to relocate Vermont Livestock from Ferrisburgh to a new facility in Middlebury; and the recently approved extension of the runway at the Middlebury State Airport. He has also been lobbying for new telecommunications amenities serving the seven Addison Central Supervisory Union communities, in order to combat a major deterrent to the hoped-for tech business growth: The lack of connectivity and high-speed Internet.

There are other projects in the works that Gaucher said he is unable to discuss publicly due to ongoing negotiations and confidentiality agreements.

EVALUATION, NEXT STEPS

Members of the MBDF Evaluation Task Group will spend the next several weeks interviewing Gaucher, local entrepreneurs and citizens as they help the selectboard and Middlebury College decide the future of the development fund and its administrator. The panel met for the first time on Sept. 23, at which it discussed the history of the initiative and their work going forward.

“For it to be a success, it has to be a collaborative effort,” said task force member Donna Donahue.

“I think in hindsight, some of our assumptions might not have been 100-percent correct,” she added. “Some of our assumptions that this would be just a great fit — it needed a lot more work than we had thought. Some of it missed the mark, in terms of the assumptions we made (about economic development).”

Task force member G. Kenneth Perine recalled the debate at the 2012 town meeting at which some participants asked what the town would get for its investment in the MBDF and how long would it take to pay dividends.

“We said, ‘It’s a gamble. There’s nothing cast in stone here, we could go five years without getting anything,’” Perine recalled. “But we felt we had to do something to try.”

Former state Rep. Paul Ralston, D-Middlebury, will be among those whom the task force will interview. Ralston, founder and CEO of Vermont Coffee, was candid on Wednesday in saying he would advise against continuing the MBDF in its current incarnation. He believes economic development is more effectively strategized on a regional (rather than local) basis. And its strategy he said must include investments in three critical areas: Affordable housing, transportation and telecommunications.

“Employees will only come if they have an affordable place to live,” Ralston said, noting the paucity of workforce housing.

Ralston said it’s inherently tough for local communities to spearhead their own economic development, absent the economies of scale and broader vision of a regional or statewide effort. He cited as an example Middlebury’s recent effort to recruit a developer for its EDI property. Four prospects emerged, but only one — NexBridge — followed through with the RFP process. The main reason, he said, is the town up-front placed various restrictions on how the property could be developed, thus reducing the profit margin for the developer.

“We almost need the charity of the developer to accomplish that project,” Ralston said.

Ralston applauded Middlebury for giving the MBDF a shot, but urged local officials to chart a different course for business growth.

Current selectboard Chairman Brian Carpenter also expressed some frustration that the MBDF effort has not been able to seal the deal with more business prospects. Carpenter joined the board after the MBDF earned voter approval.

“When I came in and was given an explanation of the (MBDF) position, I felt we could attract some businesses to town,” Carpenter said. “Maybe we have not gone about it in the right way; maybe we need to change our target a little bit.”

Carpenter hopes the newly formed task force can provide good advice on how the town could “get more value” from the MBDF.

Hamilton remains committed to the MBDF — though he believes it’s a process that could be adjusted to become more successful. And like Tenny, he believes the key might rest with more community involvement.

“The MBDF could be more effective,” he said. “Right now, staff works with an advisory board of college, town and local business representatives. I think we need more people to serve (formally or not) as ambassadors and networkers on behalf of our town, selling the tremendous combination of opportunity and lifestyle among the communities of artisan food and beverage, educational technology, and several other key fields where we offer competitive advantage.”

Gaucher, meanwhile, remains committed to the cause and hopes to be Middlebury’s economic development point-person for years to come.

“I love it here,” Gaucher said. “I can personally speak to the value of moving to Middlebury.”

Reporter John Flowers is at [email protected]

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