BRATTLEBORO — The pending closure of a Bellows Falls medical products company means lost jobs and tax revenue for the region.
Vermed's reported departure also represents a black eye for the Windham County Economic Development Program: Just two years ago, the company received $200,000 from that fund as part of an incentive package to grow in Vermont.
Officials are smarting from the blow, since the economic development program is fueled by a Vermont Yankee shutdown settlement and is supposed to help the region recover from the loss of the nuclear plant.
But they're also pointing to the overall success of the program, which has awarded more than $6 million so far. That includes two new allocations totaling $490,000 for an expanding brewery and an online retailer.
“The Windham County Economic Development Program funds are critical in rebuilding the economy here and need to be used in a way that not only retains and creates jobs, but creates high-paying jobs for years to come,” said Adam Grinold, executive director of Brattleboro Development Credit Corp.
Prior to Vermont Yankee's shutdown at the end of 2014, state officials and plant owner Entergy negotiated a settlement agreement. Among the provisions were Entergy's promise to pay $2 million annually from 2014 through 2018 “to promote economic development in Windham County.”
The resulting Windham County Economic Development Program got off to a rough start, with then-Gov. Peter Shumlin declining most applications submitted in the first round in 2014.
The state took a lot of heat for that decision, but the governor defended it. Commenting on the program in an interview late last year just before he left office, Shumlin said he “didn't want it frittered away on projects that all had good intentions but wouldn't have resulted necessarily in real jobs for hard-working people.”
The program was revamped in 2015 to include more local input via a manager embedded at Brattleboro Development Credit Corp. as well as an advisory council that makes funding recommendations to the state. Since then, allocations - in the form of both grants and loans - have picked up pace significantly.
In May 2015, Vermed landed $200,000 from the program as a “retention and expansion incentive.”
Vermed had been acquired earlier that year by a Buffalo, N.Y., company, and state officials said administrators were considering moving out of Vermont. The $200,000 was meant to prevent that, as was a $242,000 allocation approved via the Vermont Employment Growth Incentive.
That latter money is tied to growth reports from the company, and so far none has been disbursed, said Fred Kenney, executive director of the Vermont Economic Progress Council.
But Vermed already has gotten its Windham County Economic Development Program money. And because it was a grant, there was no provision for repayment.
It now appears that Vermed, which last year was acquired by a Japanese company, is pulling up stakes and relocating Vermont operations to New York. An owner of the Bellows Falls property where the company operates told the Brattleboro Reformer that Vermed administrators aren't renewing their lease, which expires in January 2018.
The company reportedly employs about 85 in Vermont. So far, reaction to the expected closure has focused on the loss of local jobs.
“The region is certainly sorry to see Vermed and its long history in the community leaving,” Grinold said. “They had great jobs available for many years.”
Because Vermed and its parent company haven't commented on the situation, it's not clear whether the company is attempting to relocate all employees or laying off some of its local staff. Grinold said Brattleboro Development Credit Corp. is prepared to work with state and local officials to offer assistance to any displaced workers.
While the Windham County Economic Development Program apparently couldn't keep Vermed and its employees in Vermont, officials say the initiative has shown results and is still going strong.
“When you take a look at the loan activity and the larger expansion projects, it's actually been well-used,” said R.T. Brown, the program's Brattleboro-based project manager.
There have been some big allocations, including a $2 million loan to support a $17 million expansion at G.S. Precision Inc. and a $1 million grant to back a $20 million expansion at Commonwealth Dairy.
In Rockingham, Chroma Technology Corp. received a $500,000 loan from the program last year for an expansion project with a $19 million to $20 million price tag.
Also in 2016, New England Center for Circus Arts and SchoolHack Solutions each landed $350,000 loans to expand in Brattleboro.
The program's latest allocations, announced April 24, are two loans - $350,000 to Hermit Thrush Brewery and $140,000 to Cultural Intrigue, an online retailer of home décor items and other decorative accessories.
Cultural Intrigue owner Adam Gebb said the money will support “a new website and lots of other technologies that plug into a website” for the Brattleboro-based business.
Gebb said he has told state officials that the allocation is “very helpful, and we're very thankful.”
Hermit Thrush, which is keeping its downtown Brattleboro location and expanding into a building in Dummerston, also received a $150,000 loan last week from the Vermont Economic Development Authority.
The two loans together represent about 40 percent of the financial package for Hermit Thrush's expansion, so the money “pretty much made the project doable,” said President and Brewmaster Christophe Gagné.
Gagné added that the Windham County Economic Development Program “offers entrepreneurial projects that would not otherwise come to fruition a chance.”
And he noted that repayments from loan recipients are expected to keep the program going long after Entergy's contributions stop.
“I hope it doesn't just assist us, but assists the next $350,000 loan once we finish paying it back in five years,” he said. “And even more than that, I hope it draws other professionals and quality entrepreneurs to the area.”