BRATTLEBORO — After learning of a grant recipient's pending closure, Vermont officials are seeking ways to strengthen the Windham County Economic Development Program.
The changes will be aimed at making it easier to “recapture” state funding if a receiving company subsequently leaves the state as Bellows Falls-based Vermed reportedly is planning to do.
“You can't foresee every situation, [but] we're trying to make sure everybody's covered,” said Fred Kenney, executive director of the Vermont Economic Progress Council.
The Windham County Economic Development Program arose from the shutdown of the Vermont Yankee nuclear plant.
About a year before the Vernon facility stopped producing power, plant owner Entergy and state officials signed a settlement agreement. The deal included Entergy's promise to pay $10 million for economic development in Windham County.
The state Agency of Commerce and Community Development administers that money, which is doled out in the form of grants and loans with input from a Brattleboro-based program manager and a Windham County advisory council.
Overall, officials have deemed the program a success. More than $6 million has been awarded so far, including allocations to support the expansions of major employers like Commonwealth Dairy in Brattleboro and Chroma Technology Corp. in Rockingham.
But the expected closure of Vermed shows the program's limitations.
The medical products company in 2015 received a $200,000 grant from the Windham County Economic Development Program as an incentive to stay put and expand. While Vermed administrators haven't commented on their plans, multiple news reports now say the company is expected to leave Vermont by year's end, resulting in a loss of about 85 local jobs.
In the wake of the closure news, Kenney said the Agency of Commerce and Community Development's general counsel reviewed the Vermed award “and determined that, because the grant agreement ended [in] December 2016, we do not have recourse to recapture the grant.”
Kenney added, however, that state officials expect to apply the lessons learned from the Vermed experience to future Windham County Economic Development Program awards.
“We're looking at putting better language in the grant agreement so that we're covered when something like this happens, even beyond the grant term,” he said.
That language could cover instances when a grant recipient leaves the state; closes altogether; or even cuts its workforce by a certain percentage, Kenney said.
Key details of the proposed “recapture clause” - including the length of time that would be covered by such agreements - haven't been worked out.
“We're looking at a couple different options but haven't decided yet,” Kenney said.
He said state officials will be making decisions on how to tweak the program. But they also have been talking with members of the Windham County advisory council that assists in developing, marketing, and administering the initiative.
“They're aware of what we're working on, and whatever we come up with, we're going to get their input,” Kenney said.
Adam Grinold, chairman of that advisory committee and executive director of Brattleboro Development Credit Corp., said he would “strongly support” new language for the program's financial incentives.
While an initial award might call for retention of a certain number of jobs, “best practices would be to also require a continued compliance period for maintaining operations here in Windham County,” Grinold said.
“The challenge in these circumstances is to establish language in the clawback terms that provides real, actionable recovery options,” he added.