NHBR's editors met recently at the Keene offices of Better Homes & Gardens/The Masiello Group with businesspeople from around the Keene area to get their take on how the region's economy is faring and what their expectations are for the future.Participants were:Tim Murphy, executive director, Southwest Regional Planning CommissionMary Ann Kristiansen, executive director, Hannah Grimes CenterBill Hutwelker, Realtor, Better Homes & Gardens/The Masiello Group, KeeneGary Oden, manager, Keene regional office, New Hampshire Small Business Development CenterEileen Sarson, business adviser, New Hampshire Small Business Development CenterDavid Caruso, president, Antioch University New England Nancy Proctor, managing broker, Better Homes & Gardens/The Masiello Group, KeeneWhat do we mean when we talk about the Monadnock Region?Tim Murphy: Regionalism itself is kind of subjective -- the state struggles with that, as well as others who try to undertake the task. In New Hampshire, there are nine regions, according to the Office of Energy and Planning. They call the southwestern region -- all of Cheshire County and the eastern path of Hillsborough County, and Langdon in Sullivan County -- the Monadnock Region. That comprises 35 towns, roughly from the Connecticut River and then most of the western half of Hillsborough.So for the most part, do businesses in Keene do businesses throughout the Monadnock Region? Bill Hutwelker: With commercial real estate, most of our business is within Keene, but we are reaching out to Milford, depending on the category. But Keene is the true hub from which everything comes.I was on the development board in Swanzey to create a downtown center, but regardless Swanzey is completely dependent on Keene. So if it did have a downtown of sorts it would still have to somehow connect with Keene -- it just doesn't have the infrastructure.David Caruso: We're definitely regional -- our students and faculty are engaged throughout the region as defined and in terms of all the practicum and internships our students do, the government agencies we do business with, the nonprofits. We're also a statewide and New England-wide institution, but the big part of our impact is regional, and not just Keene.Murphy: One interesting dynamic is, as goes Keene, so goes the region and as goes the region, so goes Keene. It is a symbiotic relationship.For example, consider the fact that we are here between 9 and 5 during a weekday. The population of Keene is 2-½ times what it will be tonight when I go to bed. It is the regional hub, it's the service center of education, commerce and medical -- the list goes on.And if you look at commuting statistics. you'll see that the surrounding towns are in many ways bedroom communities for the city. But that doesn't mean there isn't other activity going in around the surrounding towns. They have their own dynamics going on with one another. Then, if you go to that west corner of this region, the town of Hinsdale's gravity is shared with Brattleboro, Vt.Is it wrong for an outsider to look at the Monadnock Region as being like an island, separated from a lot of what's going on in the state?Gary Oden: I personally think that impression is from the institutions we have here, like Keene State, the hospital, and those are very stable employers. That's one of the reasons we're more stable on the employment and economic side. The isolation you talked about, we certainly feel that when talking to folks from Peterborough about coming out to events in Keene. The mountains in the way tend to be a barrier. It's a physical barrier. A good example is sometimes we try to get folks from the High Tech Council to bring their meetings out here. The answer to that is almost always, "We want to stay more in the center."I think that in some ways the isolation is what gives the region some of its strength, actually. People work here, they live here, they eat here, they do their business here, and they feel pretty comfortable doing it all. Nancy Proctor: We're not within commuting distance to Boston, and I think that's been a big factor. We don't get those big highs and big lows, like those in the Manchester, Nashua and Seacoast markets, because those people can commute and work in Boston and we can't. That's been a big factor as to why we haven't seen the big highs.But when Nashua and the Seacoast recover, we're slow to recover if we've been in a down market.Eileen Sarson: I think the isolation is a part of the region's strength. Because they work here and play here, people trust each other, so you can develop a different relationship with somebody. That is part of what Mary Ann has tapped into -- bringing more collaboration to the region.Mary Ann Kristiansen: I think we have some real anchor institutions here, and some real anchor companies. And then we have a diverse array of small independent businesses.And I think that broad range of business type, size and age has developed because we are fairly independent and fairly less dependent on the rest of the state.In some cases we're probably more connected to local, small businesses than other parts of the state because some of the larger manufacturers have such a big impact. I think we have a really strong local economy, which helps.Our unemployment rate is in the 4s now. New Hampshire has been low, but we've been even lower. I do think in part that is because we are a very collaborative community. We're known for that, we have a history of that.Do you have some examples of that collaboration?Kristiansen: Bringing the Internet to the area is a good example. A group of institutions that put together MonadNet a few years ago. Another group brought wireless to the area. Antioch is involved in a million community projects - they're involved in a bunch of different things.There's meetings all the times here that have broad representation of different groups.When I look at our business groups we have everything from high-tech manufacturers to farmers all sitting at the same table. All learning and growing together. New businesses, multi-generation businesses. I think you see it all the time.Caruso: The business community really collaborates with the nonprofits. Through philanthropy, through partnerships. It's very vibrant and rich. The major businesses always step up to the plate.For example, one of our institution's missions is social justice and community service. So we launched an annual award event to honor citizens who have given tremendously back to the community, and it's also a fundraising event for a scholarship endowment. For the very first year, it was completely packed and far exceeded our expectations.We are getting in the planning stage for the second year, and we already have some companies calling us up who we didn't even approach last year to come in and support the event as a corporate sponsor.Murphy: Another example of collaboration is the region's largest redevelopment project, located just a few blocks east of us. That's the railroad redevelopment property. That is a great example of collaboration in the business community, the local banks and human service organizations.It has medical offices, a hotel, a senior housing complex, the home of our community action program. This was a parcel that had been sitting vacant for decades -- the last large parcel in the downtown area. So they did it right by waiting, getting the right proposal and the right people willing to play and getting funding.Oden: Another great example is the regional center for manufacturing that has been ongoing for three years or so. It's a collaboration with the education system, Keene State College and adult education. As I said, we got involved as a nonprofit to try and add some assistance. This is one of those things that has the potential to make Keene is a unique place in country -- finding a way to generate knowledgeable employees for the manufacturing businesses that are here.There are 80 or so companies in precision manufacturing here, and for Keene to be the one to generate the workforce makes a lot of sense.Caruso: In talking to many of the business leaders who either moved larger companies here or started firms that grew, they want to be in an area like this. And they know that they can attract quality employees to this area. That's true of C&S (Wholesale Grocers) when they came from Brattleboro. I think that it's the ecosystem of this region that is really powerful and important to a development of business.Murphy: To piggyback on David's point about quality of life, we are very active on the planning side in getting people together like this to talk about economic development. Several years ago, we put together a document that is referred to as the "Comprehensive Economic Development Strategy for Southwest New Hampshire." Some of the survey results that we received focused on the things like quality of life, access to the arts and culture and environmental quality.So the mission statement, unlike what you would usually find in an economic development plan, wasn't economic development running rampant. It wasn't about the need for infrastructure at any expense. It wasn't about attracting people at any expense. It's about maintaining the landscape that we have that has made this region what it is. That's a real fundamental hallmark. I brag about it because it's unlike what we see in other regions in New Hampshire.Kristiansen: I see in companies if you have an overflow and you have a competitor, people will reach out to that competitor and get the job done and shipped out. That happens here. There's enough of an industry. There's enough collaboration that people will reach out to their competitor to get it out the door. It's a pretty amazing community.Oden: We have organizations that get together once a month as resource partners. And these resource partners sometimes overlap each other. In other areas these are competitions. Here, they not competitive, they are in fact collaborative. For example, if you were going to do a course on taxes this month, another group won't so they don't step on your toes. It is a cultural thing.Murphy: Another example is how our human resource organizations and our housing organizations work with one another. They are often competing for the same federal funds and same programs.For example, Southwestern Community Services, our CAP agency, provides senior housing in some of the surrounding towns -- further away from the area but still in the Monadnock Region, whereas the Keene Senior Housing Authority will provide housing in the immediate area. So they will collaborate with one another so that they are getting out of one another's way when it's the right thing to do. It's a great point. Not only do we collaborate, but we collaborate in a very cooperative and successful way.Developers from other parts of the state sometimes talk about the difficulties they've had with planning boards and other local bodies. Is that something that is true here?Hutwelker: I think it's important to realize that each community has its own jurisdiction, so we can't collectively look for an answer. Something that might have regional impact and can be positive for the region isn't necessarily going to receive a favorable response in the community, because they don't see it as being beneficial to them.I think it really the approach. If people handle themselves with a degree of decorum and respect in the process and volunteers sitting in the chairs making the decisions and provide them with the appropriate information then the process is fairly smooth.Kristiansen: The region has good, strong planning, which a lot of regions don't. Some people call that "business-unfriendly," but look -- we have a stronger economy. It's unfriendly to rush and hurry projects. Sometimes good projects get caught up in that, and it is slow. But you're right, if you take the right approach and you're professional and know what you're doing, I think the overall, in my opinion, impact for our area is that it's pretty well planned and our economy and our community life have fared well.I think that if you're talking about that regional area, it just gets really difficult because you have these little towns with volunteer boards. It's really different town by town once you get out of Keene.Hutwelker: Our challenge, it seems to me, is to recognize that we have these opportunities and we need to become more proactive somehow. We need to draw retailers, which is increasingly difficult because of the increase in the Internet. I've owned two businesses in the past 20 years, and there is always that give and take between Main Street and the Colony Mill, but there's never been a joining.I would say in the last six or seven years, there has been a fleeing of retailers from the Colony Mill, the shopping center of Keene, to Main Street. Main Street looks good, but this part doesn't look so good. We just haven't been able to create the incubator to bring in small entrepreneurs to start the development of those small stores.Kristiansen: One of the other things that I think has helped our community in recent years is Antioch. We're known as a green community, a progressive community. A lot of their processes and what they have taught has been embedded in their graduates, and the graduates then try to create jobs for themselves because they don't want to leave. I think that's had a big impact on everything. They are in our government, our businesses, our nonprofits.Caruso: How it's evolved is kind of interesting. Antioch University New England was the first environmental studies program in the country, started by a group of entrepreneurial, really forward-thinking faculty members who had a passion about the environment. It was the year after the very first Earth Day, in 1971. This little campus has graduated more degrees in environmental studies over the last 10 years than any other university in the country. The University of Montana is second, and their number of graduates is only half of what ours is.An amazing number of them just fall in love with the region and stay. They make a tremendous commitment and have a tremendous impact on our community. It's kind of like a match made in heaven at this point.What is the housing market like right now?Proctor: The amount of units being sold has definitely picked up since the same time last year. The prices are at best stable, if not still declining -- since the financial crisis, the median price has dropped at least 30 to 35 percent. A lot of transactions are very difficult to get through the banks. There are a lot of regulations now that we didn't have to deal with before. And that really is making an impact on the real estate in this area right now.Are there any concerns about the area, for the immediate future or long term?Kristiansen: Our broadband. We don't have good, fast broadband networks. We have some things in the works. I don't know that there is enough attention being paid to connecting them, and I don't know that there are enough resources being put behind some of the alternatives, but I do think we could very easily find ourselves as a non-competitive part of the state in five years.Proctor: People won't buy houses that don't have DSL. And we have a lot of places like that.Murphy: I think we have a systemic issue that we are struggling with, having to do with the fact that we are reliant on the private sector as the provider. We don't meet the private sector model for causing them to come and respond to our needs. That's a real problem.I think we need legislative help. There has been a bill floated for the last three or four sessions. It's enabling legislation to give them the ability to bond for broadband infrastructure, the same way municipalities have the ability to bond for water and sewer lines, sidewalks, parking garages. And it's continually shot down.Why is it shot down? Because the industry has been very successful in seeing that happen. So we need to find a way out of this systemic fix that we are stuck in.I have the same concern as Mary Ann, that looking down the road in five years that could be something that's really a problem for us. But I think our fix is more working with the industry and the providers, taking advantage of the programs that we have taken advantage of -- some of that is going to help it, but I think we need more legislative attention. We need to educate the people that we elect and put in Concord about this very issue.Hutwelker: It's a competitive disadvantage for the state. Massachusetts has a very similar situation west of the Connecticut River all through the hill towns. But the state went after a huge chunk of money -- I think it was in the stimulus bill. Vermont too. So very similar to rural New Hampshire, competitive states are going to be miles away.Sarson: And so many people work out of their homes now. They want a service they can rely on. I've even heard of people sometimes standing in their driveways because that is the only place they will get a connection.What about the New Hampshire FastRoads broadband project?Murphy: The logic behind FastRoads is that it is building the interstate, if you will, for the backbone of the system that will then make it feasible for the providers to build the last mile. Of course, the middle mile isn't built yet so we haven't seen it unfold. But that is the logic behind it. Good progress on the backbone is being made. I think we're a few years from implementation, but the question is will it be enough? Because the last mile is still going to be a challenge in the less-dense parts of this region.Someone mentioned Massachusetts jumped on that opportunity, so did New Hampshire. They got $45 million in federal stimulus money with a $22 million match. The FastRoads part of that I think was $7.5 million.Kristiansen: We've been involved with an entrepreneurial company that has been doing some last-mile wiring. This little entrepreneurial company based in this area working on the last mile is doing work in Vermont and Massachusetts with communities there who have the money to get out. How do we get a community effort going in Keene to have this discussion?Caruso: Transportation is also something that will need to be addressed in the region eventually.Murphy: I would add energy to the list, the concern having to do with the ultimate cost of energy. The fact that a geopolitical environment is one that can be tenuous at times and how are we going to fare in the event of a doubling or tripling of oil prices? Every region in the area should be thinking about that, actually.Hutwelker: We are heavily dependent on heating oil. From a real estate perspective, or even just a living perspective, people need choices now. Can you imagine if the oil pricing goes up, say, 50 percent -- can you imagine the catastrophic event that would happen? And with the rise this year, we were lucky. But imagine if it was just a normal winter. People would have to be deciding on paying their oil bill or their mortgage.Caruso: We're heating our whole campus facility with propane. It's a great expense - trucking it in. Propane and heating oil compound an environmental problem. Because you have to truck it around with diesel engine vehicles, constantly reloading tanks at the site.Kristiansen: We had a meeting a couple weeks ago with a pellet company that's developing more high-energy pellets and is looking into going into regions and help localize the heat energy production. We brought in a group of lender institutions and employers to talk to this company about using this specialized pellet that was developed by the University of Maine. If there is enough demand, then a local pellet plant could be built. And it could be like a community energy model.With their model, they say that the cost is about 10 percent lower. It's an efficient, easy way to heat. So how do we make that transition to what was 80 percent oil in New England? There's some exciting things that could happen but how do you make that transition?Caruso: There is similarly a new approach in the geothermal realm, where a company will come in and install your geothermal system and own it so that the capital investment isn't needed at all by the property owner. They'll sell you the heat and cooling at a fixed rate. It's a New Hampshire company actually, Lvestus Energy.
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This article appears in the June 29 2012 issue of New Hampshire Business Review