BELLOWS FALLS — At a recent Rockingham Selectboard meeting, Francis “Dutch” Walsh gave his annual report, describing his office's work to facilitate new business and economic development in both the village and at the town's industrial park.
Walsh serves two roles - development director for the town of Rockingham and executive director of the Bellows Falls Area Development Corporation - as the result of a one-page agreement between the town of Rockingham and the BFADC in 1984.
Since the public announcement of Sheriff Keith Clark's efforts to redevelop the former Chemco property into the Liberty Mill Justice Center (LMJC), some opponents to the project have called into question Walsh's dual role.
Rockingham resident Charlie Hunter posted an exchange of correspondence centered on these dual roles to a Facebook group opposing the project.
Hunter, who shortly after the exchange helped found Rockingham for Progress (RFP) in response to the LMJC project, had quoted Municipal Manager Willis “Chip” Stearns, describing the function of the development director: “support[ing] people with ideas and a reasonable plan.”
Responding to accusations of lack of transparency in the development process of the LMJC, Stearns replied to Hunter, “When any developer requests assistance with the trust of wanting to work the plans out before going public, then the administration needs to follow their request. The developer gets to make that call.”
Stearns continued, “Otherwise, if a seed is planted but not sprouted before presentation the anticipated end results are not identifiable.”
In the exchange, Hunter asserted that the development director should “have an ongoing dialog[ue] with the citizens, your ultimate employers, to explain town policies, administrative decisions, and rationales,” and he said he urged Walsh to do so.
With one individual serving as both a town employee and as the BFADC's executive director, many have questioned the right of the public to details on projects like the LMJC, to the extent that taxpayer funds are used to advance such proposals and assist the developers.
By mutual agreement
The 1984 agreement with the town describes the role of BFADC as “primarily involved in accommodating quality industrial, commercial, and residential development opportunities by providing research, staff support, grantsmanship, planning, design, marketing, and other professional support services to said projects.”
It further notes that the BFADC makes “certain resources available to the Town that would otherwise be unavailable due to its non-profit status.”
The development director serves as executive director of the BFADC without additional compensation. The agreement also stipulates that responsibilities for the town supersede those of the BFADC “in the event of a conflict of scheduling” and “that if the duties and responsibilities of the Executive Director become excessive in nature, that an evaluation of the position be resolved at a joint meeting.”
“The BFADC does not have a budget, per se, primarily due to the agreement with the Town of Rockingham,” Walsh told The Commons.
When asked who he answers to, Walsh replied, “As for a 'chain of command,' that really does not exist. I work closely with the state and with the regional development and planning organizations. If I need assistance with a project that we do not have the resources [for], I will contact either the state or regional entities.”
Walsh paints a picture of the BFADC as an economic tool that can be used to hold industrial property in the interests of local economic development, often while the land is undergoing cleanup from the region's long - and often-toxic - industrial heritage.
As a nonprofit, BFADC can access brownfields funding, whereas a private owner or for-profit company must ante up the often-prohibitive costs for these studies to size up the extent of environmental damage to these commercial and industrial properties.A business with a “planned use” for an old mill building can approach the BFADC through Walsh, for assessment to determine viability of a location.
One such property is the former Chemco building at 203 Papermill Rd.
The BFADC currently holds an option through Sept. 30 on the property. The $5,000 option fee is from the Windham County Sheriff's Office, according to Walsh; as a nonprofit, the BFADC can serve as a fiscal agent for the project, whose economic viability is far from certain. A building assessment for the former paper mill is still in the works.
The BFADC ”is currently operating on a cash flow operational budget based on the cost of the work being undertaken at the Robertson [Paper] Mill,” he continued, noting that the budget “is based on the $300,000 loan/grant that we received from the state for the cleanup work on that building.”
The BFADC has a subsidiary limited liability corporation, Island Holdings, created for the management of the brownfields activities around the Robertson Paper Mill.
That property is now slated for demolition – a project that must include a plan to remove hazardous materials from the site – following building assessments and brownfields studies, and according to Town Attorney Stephen S. Ankuda, the registered agent of Island Holdings, the LLC is a way to “compartmentalize liability, in case anything happens.”
Looking at the budget for the Development Office from the Town General Fund for the 2017 fiscal year, Walsh noted that the budget includes the Certified Local Government (CLG) administration and projects. It also includes the town's annual payment to the downtown organization, the Bellows Falls Downtown Development Alliance; the Greater Falls Chamber of Commerce, and the annual payment to Southeastern Vermont Economic Development Strategies.
The development office budget of $102,100, includes the director's wages of $63,000; $11,000 for CLG administration (60 percent of which is covered by the state); $5,000 for BFDDA director's wage; and a SeVEDS payment of $15,000 annually.
A response to a changing economy
According to Pat Moulton, secretary of the Agency of Commerce and Community Development, development corporations like BFADC were created in direct response to the dieback of river mill culture as a way for municipalities to development economic opportunities and bring much needed growth back to towns beginning to fill with abandoned mills, and untapped business opportunities.
Corporate entities like BFADC are not uncommon, said Moulton, who herself served as executive director of the Brattleboro Development Credit Corporation (BDCC) before her appointment as secretary of the Agency of Commerce and Community Development.
In the 1960s and early 1970s, “the paper mills were beginning to close, and the historic manufacturing base up and down the Connecticut River was changing dramatically,” Moulton said.
“One of the efforts that was made was to provide the environment where that historic activity could be replaced with a more forward-looking or more modern outlook,” she said.
Moulton told The Commons, “A lot [of area or regional development corporations] have been replaced by community development offices.”
That said, “the benefits to having a development corporation are to develop real estate in keeping with the goals of economic development and growth,” she observed.
A case in point: When the BFADC was incorporated as a Vermont nonprofit in 1965, according to Walsh, it was founded by local businessmen, including attorney Tom Salmon (who served as governor of Vermont from 1973 to 1977), and attorney George Nostrand.
And that was primarily to “develop [the industrial] park,” on Route 5 north of the Village,” Walsh said. Then when the industrial park needed to bring water and sewer for prospective industrial park businesses, the BFADC was able to access funding for the project.
LAD vs. RAD
The BFADC is a tax-exempt, tax-deductible nonprofit local area development corporation (LAD), as opposed to a regional area development (RAD) corporation.
As an economic development tool, the BFADC may be used by the development office to facilitate a new business's access to brownfields assessment and mitigation funding, as well as state and federal loans and grants within Bellows Falls and Rockingham.
For instance, the development corporation may hold options on real estate a new business might be looking to develop, while awaiting said assessments that will determine suitability of a business in a location.
Walsh explained that prior to permitting or outright ownership of a new business to a location, this limits the liability for the new business owner and removes these obstacles to success down the line.
One of the differences between RADs and LADs, Walsh said, is the 12 regional development corporations in the state can access yearly administrative funding from the state, but funding for local area development corporations is not legislated.
Such funding comes instead from grants, private investors, and government loans, said Walsh, who typically seeks such funding in his role as town development director.
When asked if BFADC was the first local development corporation in the state, Moulton said, “That may be true, although Barre Development Corporation started a long time ago, too.”
She said that many development corporations started as local but later on changed to a more regional development corporation. She said Bennington County Industrial Corporation - now a regional development corporation - began in 1949. However, Barre and Randolph both chose to stay locally focused, being similarly contained within unique geographic locations, not unlike Bellows Falls.
Developing industrial parks
Jill Michaels, who served as Rockingham Development Director from 1989 to 1991, was present to celebrate 25 years of the BFADC during her time in office.
She said the historic role of development corporations was to help develop industrial parks as the economy in the mill towns along the Connecticut River started to slow down in the 1970s.
Meanwhile, in Brattleboro, the BDCC was around at that time as a regional development corporation, eventually developing the Exit One Industrial Park.
But for Rockingham, the second largest town in the region, not as much funding was available from the BDCC, Michaels said, and “there was not direction to become more inclusive.”
It made sense to create a smaller organization to support growing the Rockingham Industrial Park, she said. Farther north, the same thing was happening in the Orange County community of Bradford, for the same reason: the Pierson Industrial Park.
Michaels said the earliest members were leading business people and lawyers who saw the need for a local area focus for development. The BDCC was established in 1954 and was necessarily focused locally, and was not relevant or useful to Bellows Falls business owners and developers, so Salmon and Nostrand (among others), took the initiative and formed the BFADC to specifically serve local area economic and business development.
Michaels explained that development offices “have the ability to package development deals,” coordinating with local and regional agencies to create packages of financial incentives to lure or retain industry.
But development offices can offer many other forms of assistance to developing economic opportunities, including helping start-up businesses get a foothold with revolving small business loans.
“[A development office] can get financing for a project, and it can assist a for-profit developer,” as well as access state resources, and help with planning,” Michaels said. “It can function as a developer, or it can function assisting project development.”
From planning to development
In Rockingham in 1983, a municipal departmental reorganization included changing the previous department head title of town planner to director of development.
The 1983 town report notes that from its early days of land-use planning, the position was recognized as a changing role for the director, who was subsequently charged with primary economic development, energy conservation, capital improvements, and public relations. Day-to-day duties were expanded to housing rehabilitation, historic preservation, and downtown redevelopment.
Activities of the office were noted to include grantsmanship, capital improvements, industrial and commercial development, public relations, community services, land use planning, research and development, historic preservation, housing rehabilitation, and real estate development.
The methods employed, according to the 1983 report, had the development office taking a direct role in designing, implementing, and monitoring projects.
“In effect,” the report reads, “all components of planning, construction, program evaluation, and project design must pass through the development office at one point in this process.”
The Industrial Park and the accompanying need to bring water and wastewater services there were early projects of the development office.
Brownfields cleanup
One of the stated primary functions, according to Walsh, of his office today is to deal with brownfields property in town that is or might be contaminated by business or industrial chemicals.
The Windham Regional Commission lists an additional 49 potential sites covering more than 50 acres in Rockingham. This pollution represents a significant liability when it comes to attracting new businesses to reuse these sites, Walsh said.
One of the functions of the Windham Regional Commission (WRC) is to oversee brownfields remediation through the state Brownfields Reuse Initiative program. In Rockingham, that funding has supported cleanup of five sites, including properties on Depot, Westminster, Canal and Mill Streets in Bellows Falls, and Main and River Streets in Saxtons River.
Walsh explained that one of the criteria for getting brownfields funding is that the proposed site has a “planned use” for which purpose the cleanup is being done. His office - along with BFADC, when it's necessary as a non-profit real estate developing corporation - accesses, facilitates, and/or submits funding applications to clean up such properties and make them suitable for reuse.
Thus, Walsh said this resource is vital for the community as a river mill town that wants to make relocating to or setting up businesses in the historic mill buildings, attractive. And his office is crucial matching this funding with sites and interested developers.
Walsh asked rhetorically what business is going to relocate at a known brownfields site and then be saddled with the cleanup bill?