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In Burlington, at Least, It's Not the Economy, Stupid 

Local Matters

Burlington’s relative vigor in the face of a global economic swoon is the incumbent mayor’s best selling point in the upcoming mayoral election. Even challengers to Progressive Bob Kiss preface their criticisms with nods to the success of his party’s development efforts over the past 25 years.

“I acknowledge they’ve done some things that are good,” Republican candidate Kurt Wright says. “There’s no denying that Burlington’s a great city.”

Dick Heaps, a partner in Northern Economic Consulting, agrees that current conditions in Burlington compare favorably to those in most other cities. And he could never be described as pro-Prog.

The Kiss administration hasn’t gone so far as to proclaim Burlington’s economy “recession-proof,” but statistics confirm that the Queen City is faring much better — so far — than the rest of the state and the country as a whole.

Six months into a national skid that began in December 2007, Burlington was still gaining traction on the employment front. In roughly the two years leading up to June 2008, Burlington employers added nearly 1400 jobs, according to the latest figures available from the Vermont Labor Department. Only 207 jobs were created in the rest of the state during the same time span. The corresponding growth rates were 4.4 percent for Burlington and 0.1 percent for the rest of Vermont.

Hiring continues in the city even as unemployment elsewhere climbs to heights not reached since the early ’80s. The ARD consulting firm, Dealer.com and Burton Snowboards are among the Burlington companies currently looking for workers, says Bruce Seifer of the city’s Community and Economic Development Office (CEDO). The captive insurance sector — already the source of an estimated 400 downtown jobs — needs more accountants to keep pace with its local expansion, adds Molly Lambert, head of a trade association serving the Burlington-based underwriters for some of the biggest U.S. corporations.

And while opportunities have shriveled for the construction industry elsewhere, local developers recently unveiled plans to add a wing to an existing hotel on Battery Street and to build a new one alongside it. Construction is scheduled to start in September.

This performance can be attributed in part to the development strategy followed by CEDO since its inception early in the Bernie Sanders era. “Some people look outside to save local economies,” Seifer says. “We’ve looked inside.”

The localism ethic may be helping to immunize Burlington against the layoff epidemic infecting many firms with national or global footprints. CEDO has concentrated on nurturing once-small businesses such as Gardener’s Supply, Seventh Generation and City Market that have emerged as major employers. The city has also invested heavily in a municipally owned fiber-optics network and other infrastructure initiatives essential to the 21st-century economy.

Then there’s that intangible “Burlington mystique” that attracts clever entrepreneurs and hip young professionals, observes Doug Hoffer, an economic consultant close to the Progs. “It’s a place where people want to be,” he says.

To a significant extent, however, the stability of the city’s economy has little to do with the Progressives’ policies. About one-third of Burlington’s jobs reside in the health-care, academic and public sectors, none of which has undergone sizable scale-backs. Fletcher Allen and related medical facilities have, in fact, served as the main engine for Burlington’s job generation in recent years.

And local higher-ed institutions don’t just provide secure and well-paying jobs; they also attract more than 10,000 generally affluent students who help keep Church Street hopping. The city’s shopping district remains healthy, with its dining and drinking outlets “doing great” and its retailers “holding their own,” according to Church Street Marketplace Director Ron Redmond. The storefront vacancy rates cited by mayoral challengers as worrisome indicators are actually “not unusual,” Redmond says.

The city has likewise benefited from addition by subtraction. Several manufacturing companies have left Burlington for larger quarters in the suburbs, and it’s this sector that has been most brutalized by the recession — a point on which Heaps and Hoffer agree.

Burlington’s economy should be seen as “very fragile,” Wright suggests. He notes, for example, that Church Street’s heavy reliance on Canadian tourism may prove unsustainable as the loonie dives in value. “We need to be far more aggressive in bringing businesses into Burlington,” Wright argues in an assessment shared by Democrat Andy Montroll and Independent Dan Smith.

Heaps sees stagnation as the long-term outcome of Progressive priorities. The heavier tax burden that Burlington imposes on businesses, along with the obstacles it places in the path of large-scale commercial development, could cause the city to fall behind South Burlington in terms of population and economic output within the next 20 years, Heaps predicts.

In the shorter term, too, Burlington will not be able to sustain the economic growth rate achieved in the last two years, says Andy Condon, chief statistician for the Vermont Department of Labor. The fourth quarter of 2008 “is going to show much weaker results” for the city’s economy than the preceding periods, he says, but those numbers won’t be available until June 2009.

Hoffer and other analysts also point out this national recession is unique because it’s weighing heavily on both ends of the economic spectrum. Even the best of times aren’t all that good in the Old North End; fewer jobs mean tougher times for Burlington’s low-income residents. But the city’s investment class is also feeling the pinch. The people who make things happen in Burlington — including helping the poor — have taken a huge hit in the stock market.

Burlington’s voters will decide next Tuesday which interpretation of the city’s economy makes more sense: the optimistic appraisal offered by the Progs or the gloomier prognosis put forth by Montroll, Smith and Wright. Then again, maybe the economy won’t prove the decisive issue in a city that is holding its own on a precarious tightrope walk over the crater where the American economy once stood.

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About The Author

Kevin J. Kelley

Kevin J. Kelley

Bio:
Kevin J. Kelley is a contributing writer for Seven Days, Vermont Business Magazine and the daily Nation of Kenya.

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