BRATTLEBORO—Local economic development gurus, policy wonks, and economy watchers warned that Vermont Yankee’s shutdown would ripple through the economy even before the plant’s owners formally announced the nuclear plant’s closure.
The announcement came in August 2013. Entergy, the plant’s owner, cited economic reasons — not social pressures from local activists or the state — as its reason for closing.
The reactor went dark December 2014 after 633 days of continuous power generation without an outage. Entergy has conducted multiple rounds of layoffs and transfered some of its 600 employees to other facilities in that time, a third of whom lived in Vermont.
Eventually, only a handful of employees will oversee the mothballed plant over the next 60 years until final decommissioning.
Considered one of the region’s highest-paying employers during its 42 years of operation, VY — and its employees — contributed to the economy through charitable giving, local buying contracts, and taxes. The region braced for the financial and social losses.
Two years after the announcement, how has the plant’s closing rippled through the local economy?
The local housing market will crash, some of the aforementioned economy gurus warned.
But is a 16.2 percent dip in Brattleboro housing sales so far in 2015, as compared to the previous year, due to VY’s closure, or are other factors at play?
According to local real estate agents, the answer is more complicated. Yes, they say: VY is probably a factor, but the economy has been rough for decades.
Data from the organization Vermont Realtors, a member of the National Realtors Association, point to lower sales in Brattleboro. Meanwhile, the data show gains in house sales in Windham County.
For example, in 2013, the number of completed sales of single-family homes in Brattleboro decreased 19.4 percent compared to the previous year. The number of closings in 2014 did increase 62.1 percent.
But as of June of this year, closings dipped again by 16.2 percent.
In comparison, Windham County sales of single-family homes overall increased in all three years.
VY’s exit is one of the area’s many exits and job losses over the past 50 years, the loss of major employers such as Berkshire Fine Spinning, The Book Press, multiple paper-making plants, grain and flour mills near the Whetstone, American Optical, H. Margolin & Co. handbags, and Dunham Shoemakers among them. Many of these companies had employed hundreds of people.
From the 1960s to 1990s, the Brattleboro area economy transitioned — more or less — from an industrial economy to a more mixed economy where industry still exists but on a smaller scale.
According to economic development organization Southeastern Vermont Economic Development Strategies (SeVEDS), Windham County’s economy has been in recession for more than 20 years.
“And we’ve survived them all more or less,” said local general appraiser Dart Everett.
Sales in Windham County up, Brattleboro sales down
“How’s the market?” is a question agent John Hatton, of Berkley & Veller Greenwood Country Realtors, hears often.
He said sometimes the up- or down-ness of the market depends as much on an individual real estate agent’s perception as on statistics.
Real estate has kept Hatton busy this year.
“It’s been pretty wild,” he said.
So, to Hatton, the market is not in a slump.
Real estate agents who have a different experience may see things differently, he said.
The real estate market “tanked” with the credit crunch of 2007-08, he said. He started to see some signs of improvement by 2012. In general, real estate is a buyer’s market, meaning that more houses are up for sale than there are buyers.
Looking at statistics for Windham County, the number of housing sales that closed by June 2015 increased 10 percent over the previous year.
The number of closed sales in Windham County have increased steadily since 2013.
“That’s not stagnant and that’s not crashed,” Hatton said.
The average number of days houses sit on the market until the final sale has also remained mostly steady with a little increase, he said.
If the market were crashing then real estate agents “would see negative growth in closings” and more days on the market, Hatton said.
Hatton also said the data didn’t track whether sellers’ initial prices differed wildly from the amount they actually received. In other words, he said, he couldn’t see if Windham County sellers were taking huge losses.
The numbers within Brattleboro itself are less positive, Hatton said.
Define ‘crash and burn’
When asked if the Brattleboro real estate market is taking a dive post-VY, John McPherson, also a Berkley & Veller agent, responded with a question of his own: “What is a crash and burn?”
In McPherson’s opinion, a housing crash equals what was seen in some areas of the country during the Great Recession of 2008-09, or nationwide during the Great Depression.
So far, things in Windham County aren’t that bad.
Any decrease in the economic activity could be a function of VY or something else, or a combination, McPherson said. He added that some of the data are too fresh to support conclusions and that the picture might be clearer by year’s end.
Windham County’s financial health has been bad for a while, McPherson said. Mostly it lacks an economic catalyst to beef it up. New economic development initiatives will take years.
That said, Brattleboro sales “have been terrible this year,” McPherson noted.
McPherson described the decrease in local sales as odd. Overall, he explained, the housing environment is one of activity and new home buyers. Yet year-to-date statistics show a fall of 24 percent in housing prices.
That’s approximately $3 million.
McPherson said he considers communities along the Connecticut River as part of the same “economic watershed” as Brattleboro. Yet, according to McPherson’s numbers, house sales in communities along the river are up by 21 percent.
Why Brattleboro is down while the rest of the county is up remains an unanswered question, he said.
At the moment, McPherson proposes two hypotheses: One, new homebuyers are finding less-expensive houses outside Brattleboro. Two, Brattleboro’s high property taxes, which everyone loves to complain about, are keeping would-be homeowners away.
But McPherson won’t say that VY’s exit has left the economy unscathed.
Losing an employer with a $100 million payroll will leave a mark. “That’s a significant chunk” of disposable income out of the area, he said
With 10 years of real estate experience under his belt, McPherson said that he remembers 15 years ago when a 20-something resident looking for work was spoiled by choice. Those companies, however, have moved, shrunk, or stopped hiring.
With the manufacturing base basically erased, he said, the big employers now are the service industry, schools, and hospitals.
In McPherson’s opinion, business clusters in the form of Internet-based businesses, agriculture or food production, and building technologies could attract new economic vitality.
Vermont has a good quality of life, and people want that, he said. He added that the area would benefit from setting up infrastructure that allows people to bring their jobs with them.
Internet-based businesses, such as video game design and video production, which require fast Internet connections, would need “mega bandwidth,” he said.
The loss of high-paying jobs
Everett, owner of Everett Real Estate Services, said that his appraisals have remained stable over recent years.
He has no doubt that more houses are sitting on the local housing market than there are people looking to buy.
Of the market, however, Everett commented, “I’d never say it was crashing.”
Everett’s biggest concern for the economic health of the area is not the housing market. It’s the loss of Vermont Yankee’s high-paying jobs. What employer in Vermont will replace those $100,000-or-more annual salaries?
A lot of disposable income has left the area, Everett said, then noted that VY employees were active in the community: They gave their money and, more importantly, their time to charitable causes.
VY employees have helped make building repairs at places such as Morningside Shelter and the Brattleboro Area Drop In Center. These employees also ate in local restaurants and shopped in local businesses.
“But it’s going to hurt for a long time,” Everett said.
Everett noted that the economic ramifications of VY’s closing echoed softer than he expected.
People had time to prepare for the plant’s closing, he said. The employees haven’t left the area at once.
Some employees transferred to other Entergy plants before VY closed. Some decided to retire in the area. Others, Everett said, have decided to delay their move until a child finishes school in another year.
“It’s certainly not the disaster I anticipated,” Everett said.
He also praised former Vernon Selectboard Chair Patty O’Donnell for her work trimming the Vernon town budget to reflect Entergy’s decreasing financial output.
For Everett, however, the area’s economic struggles didn’t start — and won’t end — with the closing of VY.
“The canary in the coal mine began 30 years ago with overspending,” he said. “Governments are on a crash course on how much they can spend.”
The life cycle of a housing market, and creating a legacy
According to Bill Murray, a real estate agent for 35 years, and who also works for Berkley & Veller, “it’s too simplistic a view” to lay the entire housing market at the feet of VY.
In Murray’s view, multiple reasons exist for the slow market. The biggest shoes in the equation, in his opinion, are demographics.
Referencing data gathering by the Brattleboro Development Credit Corporation and SeVEDS, Murray said that the county’s aging population is contributing to some stagnation in the housing market.
The housing market has a life cycle, he said: Young people buy starter homes. They buy larger homes for their growing families. Children leave the nest or a partner dies and the remaining homeowners downsize.
Windham County’s housing life cycle is out of balance, Murray said. Not enough young people are buying homes. Many have left the area or carry so much debt they can’t afford a mortgage.
Murray said he hopes to see a cultivation of young people to take over existing businesses.
According to Murray, 40 or 50 years ago the region experienced an influx of people. They came for the quality of life rather than the high-paying jobs, he said. Many started their own businesses.
“We need to attract the next generation of people who bring skills and want to be here,” he said.
In offering an example, Murray pointed to four local surveyors, all in their 60s and looking to retire. These people have a knowledge of the local landscape not found in textbooks, he said.
It’s a perfect opportunity for a young surveyor to work with one of these business owners, learn the business, and then take over when the owner retires.
Murray described this as a different kind of legacy planning, one that attracts and keeps not just money but also young people who will invest in their communities, careers, and businesses.