ADDISON COUNTY — None of a wide range of business owners, executives and experts recently asked about the area’s economy were ready to announce that happy days are here again: Their attitudes ranged from cautiously optimistic to skeptical, but hopeful.
In a statement echoed by many interviewed, Waybury Inn co-owner Joe Sutton said he and others in the hospitality sector have adapted to flat or modest growth.
“Basically, even is the new good,” Sutton said. “The general concept is staying at par … or up a little bit is OK, and you have to watch your expenditures.”
Sutton, whose 2010 gross is up a few percent, falls on the more skeptical end of those who spoke to the Independent. He said spending more on aggressive marketing, even if it means just maintaining the inn’s customer base, “seems better than the alternative.”
“We don’t see any bright light at the end of the tunnel. It doesn’t seem to us there is any economic indicator out there that it is going to turn around and get better,” Sutton said. “We feel like we have to find those new markets out there, those niche markets, that we haven’t had to find in the past.”
In the same sector, Middlebury Inn general manager Jeff Costello said he is hopeful. No one he knows of is “breaking any records,” but he expects a bottom line boost in 2010 of a few percent from 2009.
Costello said the inn has more bookings now for 2011 than it did for 2010 at this time last year, and that and other small positive signs lead him to believe a rebound is on the way — just not immediately.
“I think it’s going to be a surefooted, slow recovery. I think we’re optimistic for 2011,” he said.
Within the hospitality sector, Sutton said he believes this area has more than held its own in Vermont.
“I get the sense that maybe Addison County and Middlebury are doing as well or better than other parts of the state,” Sutton said.
BANKING PERSPECTIVE
National Bank of Middlebury president Kenneth Perine — whose bank has branches in Bristol, Vergennes, Brandon and Hinesburg — is well positioned to give an overview of the county’s financial health.
“We have seen some customers who are doing very well in this economy. That’s by far probably the smallest number,” Perine said. “The majority would probably say things are a little better than last year, but not much. They’re hunkered down and trying to do business as usual … and then there are a handful of customers we have who are really struggling.”
Perine said even before 2009 his bank “started to see some weakness in our commercial portfolio,” while this year more customers with consumer loans or mortgages began to struggle. The bank has only foreclosed on one home, a total he sadly expects to rise.
Perine said the number of consumer loans that are in default by 60 days or more has also grown since 2009, but at the same time the number of its loans past due by fewer than 60 days has trended downward.
“We’ve still got some problems right now, but there are not a lot of new ones (defaults) coming in,” Perine said. “Maybe things are starting to stabilize. If you want to hang your hat on something, there’s something to hang your hat on.”
Perine — whose bank, he said, is “well-capitalized and doing great” despite an understandable drop in earnings — said the recent stock market rally gives him some hope, although he expects the impact of that up-tick and the recently announced technical end of the national recession to take time to turn things around.
“The stock market … is a positive sign. As people feel a little wealth, they may cut loose on their purse strings a little bit. But I would say the word of the day is still pinching every penny,” Perine said. “Most businesses are still doing that, most households are still doing that, and that doesn’t bode well for a quick recovery.”
In part, he said the recovery will also be slow because businesses are not yet ready to expand and hire.
“Honestly, I can’t see it getting a whole lot better. I just don’t see a lot of job creation happening,” Perine said. “There are some outliers, and the national economy is not going to hell in a hand basket. But businesses forecasting significant growth in the next year, we’re just not seeing that.”
Danforth Pewter CEO Lawrence Miller echoed Perine. Miller, also now a member of the State and Regional Economic Development and Planning Services Oversight Panel and formerly on the board of the Vermont Economic Progress Council, said businesses like his have adapted to harder times.
But, he said, most are not in a position to take a major step forward.
“People have hunkered down fairly successfully. I don’t talk to a lot of people who have run out of savings or debt capacity,” Miller said. “People have made the changes that have had to be made. Those of us who are around have had to work twice as hard for lesser results … But I don’t hear desperation. I hear frustration.”
Danforth, based in Middlebury, adapted in 2009 by acquiring another company as well as streamlining, and Miller expects 2010’s bottom line to at least mirror its mediocre 2009.
Growth will come from internal improvements, not for waiting for outside economic factors to improve, Miller said, while noting Danforth has no impending plans for workforce expansion.
“We feel the massive adjustments we had to make last year were effective … We’re in the new status quo,” Miller said. “I think it’s as good as it can be for now … As long as we can continue to innovate and make great products, we can continue to do better and better. But we can’t expect our business to grow just because there is general economic growth or growth within our sector.”
OTHER SECTORS
In other sectors, Miller said, some have benefited from federal bailout money, including companies that specialize in roadwork. Meanwhile, the construction sector, both residential and commercial, has been hit or miss.
“They have months that are good, and then things are dry for a while,” Miller said.
In that construction sector, Bristol’s John “Peeker” Heffernan, owner of Heffernan Excavating, said he sees improvement from a year ago, when he entered the winter with uncertain prospects after having laid off three of eight workers.
“It looks like it’s going to be pretty steady. It doesn’t look overwhelming, but I’m not scared like I was a year ago,” he said. “We weren’t bidding anything going into the fall … It was tough making it through the winter last year.”
Heffernan, also a Bristol selectman, said he is optimistic looking ahead, both overall and for his firm.
“This year has been busy for us. We’re having a decent year compared to last year,” he said. “We’ve got work every day. It’s not like we have to wait for the phone to ring.”
The retail sector has been mixed. Bristol is difficult to evaluate because of the major stormwater construction project that disrupted its downtown for much of the summer.
Honey Lights owner Bonita Bedard, also the Five Town Business Council’s representative to the Addison County Chamber of Commerce, said she heard plenty of understandable “bitching and moaning” about the dust and traffic tie-ups from the Bristol construction project.
Customers, including her own, often didn’t want to deal with the mess, Bedard said.
“Once they made it through all those hardhats, they just didn’t want to hang around town much,” she said.
But Bedard enjoyed a good September and expects a fall bounce-back. She said tough times and construction have not driven anybody out.
“Any of our open space goes pretty quickly,” she said. “None of us makes a lot of money, but we’re all holding on, which is all we can ask for at this point.”
In Vergennes, Addison Outfitters owner and Vergennes Partnership board member Tim Hodson said 2010 has not been a banner year. After some bounce-back earlier this year, the early summer dropped off again, and he and Linda’s Apparel and Gifts owner Linda Cook both believe the hot summer kept shoppers outdoors.
“We’re still in the woods, unfortunately. We’re not out of it yet,” said Hodson, who said cash flow is level or slightly down from 2009. “I’m not sure shoppers’ consumer confidence is back.”
Fall has picked up, however, and Hodson also noted that buyers have emerged for long-vacant buildings and possible renters are talking about empty storefronts, including one of the restaurant slots.
The Christmas season will tell the tale for retailers, he said.
“I don’t think we’ve seen anything really turn around. I think people are hopeful for next year now,” Hodson said.
Cook said her business is off from 2009, but said she is not concerned. She opened five years ago, and 2009 proved to be her best yet.
“I’m not going anywhere. Things are good,” Cook said.
In Middlebury, Forth ’N Goal owner David Disque said his Middlebury College, tourist and local business all remained steady. He is happy to report no slippage, and even a little progress.
“We’re basically flat to last year, ever so slightly ahead, maybe 2 percent,” Disque said. “We feel pretty good about that.”
Overall, Danforth’s Miller said Vermont — and Addison County — is better off than most locales, even if he expects no quick end to difficult economic times.
“We don’t have much of a boom, so we don’t have much of bust,” Miller said. “It’s been much less painful here … but it has still been very challenging for a lot of people.”
Andy Kirkaldy may be reached at [email protected].