Special Free Press report: How $600M project may change Northeast Kingdom
As one of the biggest economic-development projects in Vermont's history queues up, Northeast Kingdom residents ponder what it means for their lives and businesses.
By DAN D'AMBROSIO for the Burlington Free Press
October 28, 2012
Doug Spates, lifelong resident of the Northeast Kingdom, believes the stars have finally aligned for his hometown of Newport, perennial seat of Vermont’s highest poverty and unemployment rates, and tarnished jewel on the spectacular shores of Lake Memphremagog.
Spates’ astrological inspiration comes from the recent announcement by Jay Peak Resort co-owner Bill Stenger that he would gather up some $600 million in foreign investment through the federal EB-5 immigration program and pour it into Jay Peak and Burke Mountain resorts — and Newport and Coventry.
“I think it’s the best thing that can happen to Newport, maybe in my lifetime,” Spates said in a recent interview.
Under Stenger’s plan, there will be a biomedical research center in the city, doing non-embryonic stem cell research, selling patented medical devices and renting “clean room” space. There will be a German manufacturer of high-efficiency windows; a hotel and conference center on the shores of the lake, and two more boutique hotels on Main Street.
Finally, the Newport Airport in Coventry will get a much-needed makeover. There will also be a complete $70 million re-do of what is now known as the Spates Block, one side of Newport’s Main Street shopping and dining area. Spates, who owns Memphremagog Rentals in Newport with his wife Viv, began consolidating his control over the motley collection of buildings between Second and Central streets on Main Street in 1981, when he bought all but two of the properties. Four years ago, he secured the corner building he didn’t already own, completing the block. “It was the last piece of the puzzle to put it all together to make sure we controlled corner to corner,” Spates said. “We worked on that quite awhile.”
Now Spates has agreed to sell his block to Stenger, at an undisclosed price, so Stenger can demolish it, and replace it with the “Renaissance Block,” a sparkling new collection of retail stores at street level, and office space and residential space above, possibly going as high as six stories. The Renaissance Block will be more in keeping with the vision Stenger and many others have for the new Newport, courtesy of the upcoming flood of foreign investment.
“It’s going to totally change the nature of Newport and the way it will feel and the way it will live,” Stenger said in a recent interview at Jay Peak.
A tired block
Spates Block is currently a hodge-podge of marginal businesses and empty storefronts left by failed businesses, some decorated with garish artwork, including a poster in one window with the hand-lettered message, “It’s Not A Race,” and a drawing of a rat. There’s a flower shop, a yarn shop, a jewelry store, and two thrift stores operated by Northeast Kingdom Community Action, Inc., or NEKCA, an anti-poverty nonprofit organization started in the 1960s as part of President Johnson’s Great Society.
“Our buildings are tired,” Spates said. “They pass all the state inspections, they are not rundown ruins. Most of those buildings are sprinkled. They pass all the state regulations, so they’re in great shape that way.”
The block is also home to about 50 apartment units, some of them occupied by renters with federal Section 8 housing vouchers for low-income households, according to Spates. Seen from the back side on a recent walking tour with Paul Dreher, Newport’s zoning administrator, the ad hoc nature of the Spates Block is fully revealed in its mixture of tacked-on additions and chaotic juxtapositions of building styles and materials.
“It’s where our health officer gets calls for bedbugs,” Dreher says of the block. “There’s some pretty untenable conditions in there.”
All of the residents of the block have received notices they will have to move, according to Dreher, and Spates says he’s already depopulating his rentals by not renting out apartments again as they open up. Spates said his renters with Section 8 vouchers can use their vouchers for another one of his rentals elsewhere in the city, or “somebody else’s location.”
The Renaissance Block is slated to be completed in 2014. Stenger is confident the renters who will be displaced will find other places to live in Newport. “Doug has a lot of apartments in a lot of places,” Stenger said. “I’m not worried about that because I know there’s a solution for those folks.”
You can go home again
Like Spates, Dreher, 46, is a Newport native, although he left for a time for the big city. An architect trained at the Massachusetts Institute of Technology, Dreher had his own small firm in New York from 1993 to 2001, not far from the World Trade Center. On 9/11, he was in his office, with his back to the doomed skyscrapers, when radio station WNYC went dead.
“I didn’t exactly know what was going on,” Dreher said. “I called my friend uptown, who is also from here, and said, ‘What the hell’s going on?’ He said, ‘Paul, go look out your south window.’” Dreher couldn’t return to his offices for months. It wasn’t long before he realized that, despite his love for New York, he needed to get back to Vermont. By 2008, he had moved back to Newport, thanks to a serendipitous encounter in the town offices on Main Street.
“I got back here to visit my mom and I saw the lake, saw how depressed property prices were,” Dreher remembered. “I went into the planning office, and I said, ‘Where is the zoning administrator?’ They said, ‘He just quit,’ and John said, ‘Hey, do you want a job?’”
John Ward Jr., who offered Dreher a job, has been city manager of Newport for 14 years.
A mathematician by training at Norwich University, Ward unequivocally backs Stenger’s plans. “I’m extremely high on it,” he said. “It’s too good to be true almost.”
Newport has a “very thin middle class,” according to Ward, and lots of elderly citizens.
“I think the whole economy will be boosted up significantly,” Ward said. “They’re going to bring $500 million to invest in our community and create jobs. Think of that. That’s wonderful for us. We’ve had a lack of competitive jobs up here for decades.”
What people forget, Ward says, is that it takes wealth to take care of the “indigent,” which Newport has always had.
“When I was growing up we were all poor basically,” Ward said. “We were all in the 99 percent, but everybody worked. Today, a lot of people are still poor, but half the people don’t work. That’s bad for the community. I think this will bring back optimism and jobs, and revenue.”
Merry Hamel is associate director of employment and training at NEKCA’s Parent Child Center North, tucked in behind the Spates Block in a free-standing building, but part of the planned demolition. The parent child center offers a wide range of services, from helping teen parents complete their educations, to teaching job skills at the nonprofit’s two thrift stores, and the parent child center itself.
“We do things like assist folks with emergency supplies if they are in a crisis situation,” Hamel said. The parent-child center has not yet found an alternative location, but Doug Spates has offered to help. He was “instrumental” in finding NEKCA space for its thrift stores, according to Hamel.
Hamel has mixed feelings. “I think inevitably when something like this happens, there are some people who maybe get swept under the rug a little bit, and that does concern me,” Hamel said. “We certainly don’t want that to happen to people. If the economic benefits are what they say, there’s going to be all these jobs that could definitely have a positive impact on Newport and surrounding communities, and on the folks we serve.”
Hamel’s boss, Joe Patrissi, executive director of NEKCA, has his office a few blocks from the parent child center, in a dilapidated former customs building made from brick on Main Street. The original titles of the officials who worked there once upon a time still adorn the antique wooden doors inside the building, harkening back to the Depression era.
In the short term, Patrissi says, he has to find new homes for the parent child center and two thrift stores, but over the longer term, “the question becomes, how can we support people who need jobs to get jobs?”
“The energy now and optimism people feel is extraordinary here,” Patrissi said. “My job is to figure out how our agency can help people move up the economic ladder, and work with developers and and town planners to make sure that everybody is at the table, and everybody is involved in the conversation, because there will be a transition in the next three or four years that will make this place look very differently.”
Stenger says he met two days earlier with local and state officials, and educators, to talk about the very issue Patrissi raises. Stenger estimates the direct impact on Newport of the AnC BIO biomedical research campus, Menck Window Systems plant, Newport Marina Hotel and Conference Center, and Renaissance Block — once they’re all built by 2015 — will be as many as 1,500 new jobs, at a variety of skill levels.
“A lot of people think, ‘Oh, these people are all coming from the outside, there won’t be opportunities for local people,’” Stenger said. “Not true. What we are trying to do with meetings we’re having with the education community, our hospital, and state officials, is clearly lay out the time line and strategy of implementation. How it’s going to happen and when. How do we prepare and plan for it?”
Alone on the lake
Certainly no one in an official capacity in Newport — or unofficial capacity for that matter — wants to appear anything but optimistic about Stenger’s plans. One does not look a $600 million gift horse in the mouth, even if, as City Manager Ward acknowledges, there is a small “undercurrent” of grumbling around town.
Standing in the spectacularly sited city activity center at the head of Lake Memphremagog, its picture windows opening up on the slender finger of the lake beckoning boaters to the abrupt mountains of nearby Canada and beyond, Andy Cappello, Newport’s director of parks and recreation, puts it this way: “That’s the scariest thing about this whole development. The lifestyle we’ve got accustomed to may change, and that does change the character of this area one way or another, but ultimately it’s going to be a positive.”
Cappello was responding to Paul Dreher’s earlier comment that he has been sailing on the lake on a beautiful Sunday afternoon in July when his was the only boat on the water.
“If this was Burlington, there’d be 50 boats out there,” Dreher said.
Having moved to Jay Peak as general manager and minority partner in 1984, Stenger knows the singular nature of Kingdom life well. He lives in Newport.
“I do understand that yes, there will be some changes and evolution,” he said. “Nine out of 10 of those changes are going to be a step forward. Yes it will be a little busier. We can take it, and not lose our character, because the other undercurrent in the Northeast Kingdom is the oppressive poverty that exists.”
Every socioeconomic indicator the state measures is worse in Orleans County, Stenger says, including unemployment, single mothers, drug and alcohol abuse, spousal abuse, mental illness and the dropout rate.
“They’re all factors of economics,” he said. “You get people better jobs, more opportunity, higher wages and benefits, and over time those socioeconomic indicators are going to get better, and what this whole initiative is about is just that. Change the dynamic of the economy of this whole region and the lives of these people will get better.”
Keeping it grassroots
Friends from his former life in New York have commented on how hard Paul Dreher has fallen — again — for his hometown. He and his sister, a successful attorney who also moved away and moved back, invested in a grand old house on the edge of the blighted area of downtown for $65,000, and will establish a nonprofit organization advocating for women on the main floor there, along with renting to a few tenants upstairs.
The brother and sister also invested in a Northeast Kingdom “tasting center” downtown. Eden Ice Cider Co., based in West Charleston, will make and sell wine in the center.
“We’ll have a cafe with local foods and a farm trail map,” Dreher said. “This is a local initiative, clearly meant to be sort of a groundswell up to counter the imposition of this bigger thing.”
Dreher took a similar approach on the prime lakeside property owned by Burlington real estate magnate Tony Pomerleau, who grew up in Newport, where the $100 million Newport Marina Hotel and Conference Center will be built.
Pointing to the seven acre property — currently home to a strip mall, including a Vista grocery store — Dreher reviews the restrictions the town placed on the development. He describes where a park will be, on one edge of the property, which will eventually be taken over by the town.
“The other thing we planned, clear in our documents, is there will be public access to this side of the lake,” Dreher said. “This won’t be a resort where only people staying there can get access. In our plan, access must be afforded to the public.”
Dreher is confident the approach Newport has taken ensures that its bright future won’t be unrecognizable to the people who have lived there all or most of their lives.
“It’s my hometown. I want to live down the street I live on now and be able to afford it,” he said. “No matter how much money comes into town, I think we keep doing things grassroots up to foster the sense of community.”
A little community
Back on the Spates Block, Betty McQuillen, owner of Farrant’s Flower Shop on Main Street for at least the past 35 years, ponders her future, along with the future of her husband and co-owner James, and her daughter and store manager Kathy.
McQuillen is a small woman, wearing a worn sweater, with a quiet but friendly manner. She says she remembers when Newport was a “little community,” where everybody knew each other.
“But it’s changed from that already, just over the years,” McQuillen said. Over on Farrant Street, on the west side of town, where the business started more than 125 years ago, McQuillen and her husband still have greenhouses. They may move the flower shop there. Because they certainly will be moving, she says.
“We’re getting old. We may just go back there, we may look for another place,” McQuillen said. “I’m sure we can’t afford a place in the new building. Right now, it’s kind of up in the air.”
Stenger is a frequent customer of McQuillen’s. Told of her concerns, he insists she doesn’t have to move out of the Renaissance Block if she doesn’t want to.
“I think what people can’t see yet is the level of business that will be there,” Stenger said. “If Betty were to count the number of people walking into her store today, it might be 15 or 20. I don’t have a clue, but I guarantee you it will be 10 times that when we’re done with it.”