Taking the temperature of the Seacoast business climate
Area businesspeople assess the state of the area’s economy
NH Business Review recently met at the Chamber Collaborative of Greater Portsmouth’s offices with businesspeople in the area to get their take on the issues facing the area and its economy,
• Nancy Carmer, economic development manager for the city of Portsmouth
• Tim Dargan, vice president, senior commercial lending officer at Federal Savings Bank and chairman of the Dover Business and Industrial Development Authority
• Susan Deroy, director of business development at Monarch School of New England and chair of the Rochester Economic Development Commission
• Molly Hodgson, president of the Greater Dover Chamber of Commerce
• Sean O’Connell, an attorney with Shaheen & Gordon and member of the board of directors of the Greater Dover Chamber of Commerce
• Valerie Rochon, president of the Chamber Collaborative of Greater Portsmouth
• Andy Ward, an associate with Colliers International’s Portsmouth office
• Dave Mullen, executive director of the Pease Development Authority
NHBR: Give me your perspective on how the Seacoast economy generally works. What makes it tick?
Valerie Rochon: I think there are four basic drivers. Tourism is a major economic developer in this area; manufacturing is another major economic developer; high tech is a pretty good economic developer; and education. Those are the four that I would think are the four biggest drivers of the economy in this area.
Nancy Carmer: Finance too.
Susan Deroy: Health care is growing. Very much so.
Molly Hodgson: I also think our place in the world is an economic driver. We’re in this really uniquely situated geographic location, with Boston an hour to our south, Portland an hour to our north, and I think there’s a sense of place that certainly contributes to a lot of the economy here, as well.
Sean O’Connell: Especially with younger people, New Hampshire has challenges across the state, but I think that, in my observation around here, we do OK. We’re better probably than some of the rest of the state with attracting younger people. And I think that’s part of the sense of place and the job opportunities that we have here.
Andy Ward: Portsmouth competes with retaining youth, and I know that my story and my wife’s story is about going down for both education and work in Boston, staying there for 10 years and rebounding back to, in the case of my wife, her home. I can’t try to show a 25-year-old who’s out of college that New Hampshire has got a better nightlife than Boston, but Portsmouth is going to compete with the rest of the state and with Maine and with northern Massachusetts. I think that’s why we’re seeing some good retaining with the younger folks, the young professionals, here.
Dave Mullen: My 26-year-old son repeats that to me all the time, and he comes up to Portsmouth for the nightlife, but I hear him saying that’s a major driver. Certainly, in the 30 years I’ve been doing economic development, companies and their owners like to live about 15 minutes from where they work, and within 15 minutes of Pease in our case. You’ve got tremendous opportunity for the Seacoast, even some rural settings are not too far away. So, corporate executives tend to like the location because of all the energy you talked about, but also the opportunity to live and work in this convenient, well-located position.
“It’s still a struggle for [employers] to be able to get the workforce they need so that they can fulfill their obligations going forward,” says Susan Deroy, director of business development at Monarch School of New England and chair of the Rochester Economic Development Commission, sitting next to Mollly Hodgson.
Carmer: I think we are a region, and I think the vibrancy isn’t just Portsmouth. My colleagues in Dover, Rochester, Somersworth are all working on their arts community, their cultural opportunities, and we share a workforce. And I think one of the big drivers is Pease. The rest of the country looks at economies more regionally than we do in New England, and I think we’ve tried — at least in the Seacoast region — to look at ourselves more as a region.
NHBR: Others have talked about how, because of your location, you have less of a concern for workforce availability, but is it still a concern for the employers you work with?
Deroy: Yes, I would say, certainly for Rochester it is. You know, you have the aerospace industry up in Rochester (Albany International), and that’s been very successful for us. However, we’re losing workforce and we’re really struggling to get people into those positions. I think the collaboration we have with the local colleges has helped in pulling our students right out of Spaulding and some local schools, but I also think that it’s still a struggle for them to be able to get the workforce they need so that they can fulfill their obligations going forward. They are full; their workload is full right up until 2024.
And housing — housing for that workforce goes hand in hand, and we’re working very hard on that. I think that’s where the collaboration is coming in with our sister cities that we’re all working on the same thing, and I think it’s been a wonderful collaboration. We’re making some great strides in that.
Rochon: There are a few more issues associated with the workforce that we’re really trying to focus on besides housing. There’s transportation, because we have to get people throughout the Seacoast. Many of our potential workforce can’t afford to live in Portsmouth, so they’ve got to live outside of that. One of our hotel groups has calculated that 25 percent of their service-level workers’ pay goes to gas and parking. You cannot lose a quarter of your income if you’re making $12 an hour, so that’s a serious issue we’re working on. There’s also affordable child care, family leave — taking care of aging or sick relatives — and addiction. Those are the five things that we’re working on right now to try and address.
Deroy: Lifestyle for Millennials is a major concern. I don’t think that they see it here in the Seacoast, although they love being close to the water and they love the mountains, but it’s so far to go.
O’Connell: In the last year, we’ve hired four or five new lawyers in our office; all of them have come from other states. Some of them were from New Hampshire who left and came back, but they have all come here. They’re in their early 30s. I think all but one of them is married, but they all came back for a quiet life. They’re all professional people who come from New York and places like that and we feel we’re competing pretty well. I’ve been at Shaheen for 22 years, and we put the ads up and we advertise and we try to draw people in, and over the last five or 10 years, our experience has been that we are getting a much higher-quality candidate. And most of them who are looking for work quite often focus on the Dover office because it’s in the Seacoast.
Ward: I would say workforce; it’s a top three concern with tenants that are coming in for showings and looking at properties, especially if they’ve been through this before. And this is a wide array of industries that are asking the same question. It could be a roofing company, a tech company — it’s the same question.
What I’m seeing the answer as being is that businesses need to get even more scrappy and even more creative with recruiting, bringing back retirees — it just happened to my father about six months ago, being incentivized to come out of retirement — having really well-developed intern programs that you’re really looking two, three years in advance, getting unemployed off the sidelines, with addiction, getting them back in. Those are all really employable folks. And making sure you’re treating your own employees well because that’s the biggest pool of recruits for either your competition or the new guy I’m showing property to.
Hodgson: Our chamber is not just doing one event this fall on the topic, but two, and that just speaks volumes to the demand for information. We’re hosting one in October and then again in December. The first is sort of this big picture — listen and learn what the state is doing, the leadership at the state level. The second is a deeper dive around the region — certification programs, sector strategies, apprenticeships, career pathways. There’s training resources, youth labor laws.
And most things that Valerie and I do is that we’re saying we’re building the workforce that the Seacoast needs, not the workforce that Dover needs or the workforce that Portsmouth needs. I find that we’re using that word “Seacoast” more and more because this is such a regional issue in terms of developing that workforce.
“One of the things Dover Business and Industrial Development Authority has done is work with schools for internships, and that’s been very successful,” says Tim Dargan, vice president, senior commercial lending officer at Federal Savings Bank and chairman of the Dover Business and Industrial Development Authority.
Tim Dargan: My other role is as chairman of the Dover Business and Industrial Development Authority, and one of the things DBIDA has done is work with schools for internships, and that’s been very successful. It was in place for a few years and dribbled off a little bit, but the new school superintendent has done that in the past so we’re going to reinstitute it. It’s called BizEdConnect, and I would encourage companies to take part in it. You’ve got good kids, you train on your own, it doesn’t cost a lot of money. In several instances, companies hired these interns back full time. It’s been tremendous, out of this world, so you have to be creative. We actually went to the mayor of Dover to talk to the mayors of Somersworth and Rochester to share the program.
NHBR: One of the issues at the core of the workforce shortage is the availability of affordable housing. What are the efforts around here being done to deal with that?
Rochon: Here’s my frustration with it: There are so many people talking about housing — let’s just do something. Let’s stop the conversation and start the solutions.
One of the solutions we’re calling “housing diversity.” We simply need to find the zoning availability, the developers who will learn to do that, and the zoning has to include some incentives. Can you go up another story, so that you can put affordable housing units, so you can spread the cost? Can we make it affordable for developers to do that? That’s the priority that we’re working on right now: zoning.
Carmer: Portsmouth is challenged by a lot of things, and one of them is we don’t have a lot of land. So, when you have limited land left, you do have to get creative about zoning, and embrace this opportunity that the Legislature has offered for accessory dwelling units. We have some people taking advantage of that. We’re fortunate, or unfortunate, that the market in our downtown has driven housing development for high-end housing — no fault to any developer, they are going to make the best return they can. So the planning department has identified some areas in town to be rezoned so that we could have higher-density housing there.
“When you have limited land left, you do have to get creative about zoning, and embrace this opportunity that the Legislature has offered for accessory dwelling units. We have some people taking advantage of that,” says Nancy Carmer, economic development manager for the city of Portsmouth.
But the other thing is visualizing density. Some people like the idea, but when you look at what would have to be built, I don’t know if there’s a political will for six stories of housing in this community. We always come up against some challenge. So we’re not there yet.
But again, it’s a regional thing. We can’t solve the workforce housing situation for just the Portsmouth economy because we have something like 2.4 jobs for every resident in the city. We import jobs here. It’s a struggle; it’s a challenge, but we’re working on it.
Mullen: Economics basically rule the show. The demand is to be here — you’ll pay what it takes to be here. Those who can’t afford to be paying the extra amount of money to be in Portsmouth are those that need to be subsidized or zoning needs to be changed. There was a project that got turned down just last year — it was a large strip of land and nobody wanted it in their backyard. There was an opportunity to truly create workforce housing. So you have to change the logical aspects of what this means, to be more positive and push things through.
Deroy: Rochester is doing very well, and I know Dover is too, with their housing. We’ve been working at it for quite awhile now. We have Waterstone doing phase two of The Ridge, which is going to include housing behind the new retail center. And we also have, on Old Dover Road, a big complex going in down there. So we’ve been actively working on this for years, and it’s starting to get that momentum. And we have the land; we’re not like Portsmouth.
Hodgson: To echo Valerie’s term, “diversity housing,” I know that in Dover we try to say we have a wide portfolio of housing, everything from that first-entry apartment to duplex to the first small home, and we have a lot of retirement housing communities and assisted living facilities going in within the Dover community as well. Every end of the spectrum.
O’Connell: I think on the affordable end of it, it’s tough; I’m not really sure what the answers are. I’m on the chamber board, and we’ve talked about it, had forums on it and such, and there’s tremendous growth in downtown Dover. There’s 120 apartments in the Cocheco Mill now, and there’s got to be another 60, I think, in the Washington Mill. Cathartes has a proposal for 110 new apartments in the building next to ours — they’re everywhere. I just don’t want to be the one who builds the last one.
Ward: Right now, Portsmouth has 88 single-family homes on the market, and there’s countless buyers for those 88 listed properties. We don’t have the stock, we don’t have the land, we certainly don’t have any inventory right now to play with, so we’re working with what we have.
“Right now, Portsmouth has 88 single-family homes on the market, and there’s countless buyers for those 88 listed properties,” says Andy Ward, an associate with Colliers International’s Portsmouth office.
There’s a lot of tension that’s been put on the high-dollar per-square-foot condos that are downtown. Those are getting absorbed mostly by local folks that are either downsizing or changing lifestyles to a more urban environment. The problem I see is more towards the outskirts of the city. For a couple to come in or a professional to come in and accept a job at a law firm or accept a job at an accounting firm and commit to the city by purchasing one of these 88 single-family homes is a little more committing than it is in other municipalities. I went through that process. I found that it was taking a risk, and I found that I had a lump in my throat while I was doing it. But years later, I’m happy that we went through that process.
Hodgson: There is such a large tourism industry — folks working in hospitality, whether it’s hotels, restaurants. They’re coming as far as Farmington and beyond, and that creates a dynamic in your community that you don’t want. You want those folks to live and work in your community. Your police, fire, nurses — you want those people to be able to be in your community as contributing folks within your school system and not have this sort of “us and them” kind of thing going on, which is very much our situation.
Rochon: The other night in the workforce housing forum, the biggest thing the panel talked about was the sense of community, because if you work here and you go home, you don’t know your community. And you’re not spending your money in this community. And so, everything goes out: the sense of community, the dollars, everything goes out of the community. And that’s not good.
One of the things we haven’t talked about is the cost of education, and what happens is, these kids get out of school in $60,000 in debt. Where are they going to work? They’re going to work where there are 30 percent higher incomes. In my opinion, they’re going to get on the train to go south to Boston. We talked about how expensive it is to live here, but think about Boston. So if you live here and take a 50-minute commute to Boston every day, where you’re 30 percent more motivated to pay off your debt, what are you going to do? I would go to Boston.
O’Connell: There’s a lot of that happening. I live in downtown Durham and being able to walk to the train is fantastic. Every morning — there’s a train that leaves at 6:20 — I see maybe a half-dozen guys on foldable bikes that ride by my house to get to the train, and in the evening at 6:20, they ride back. There are a whole bunch of other people in Durham I know who do that as well. Also, a client in Dover has micro-apartments for train commuters. That’s the purpose of it. It’s certainly a benefit to the community to have these things; it draws people. They’re not working there, so their money’s hopefully coming back there.
Hodgson: I was just at our train station last night and welcomed about 40 business leaders from the Haverhill (Mass.) Chamber of Commerce. They got out on the train, they came up, we spent thirty minutes saying welcome to the city. We had the opportunity to really put our best foot forward and really talk to them about Dover and our proximity. We are talking about using the train in those ways to do mobile networking with other communities on talking about what that might look like. It goes all the way north to Brunswick [Maine]. It’s a critical part of what’s contributing to Dover’s success.
NHBR: The fact still remains that the Seacoast, Portsmouth in particular and Dover to a large extent, are attracting younger people much more than other parts of the state.
Carmer: A big part of our economy is arts and culture, and the creative industries —marketing, architecture and those types of things that are drawing in younger people. And we happen to have a hub of it here. It’s complemented very much by the performing arts, the visual arts, the Prescott Park Arts Festivals, the galleries, the arts around town and all those kinds of things. So the creative economy is drawing a younger workforce. It kind of feeds on itself, so I think that’s another element in addition to the quality of life.
“There is a challenge that we see in our office, which is the cost of education. We certainly had people who couldn't take jobs with us because their debt load from both undergrad and grad school was so high,” says Sean O'Connell, an attorney with Shaheen & Gordon.
Carmer: One thing we didn’t talk about is that the Upper Valley and the Seacoast have resources for entrepreneurs, at Alpha Loft and facilities up at Dartmouth, and to some extent, UNH. So that’s another reason why those two areas see that demographic.
O’Connell: I think there are a lot of people who go to school at Dartmouth or UNH, they come to the area and don’t leave. But there is a challenge that we see in our office, which is the cost of education. We have people who get out of school with $125,000 to $150,000 in debt and they have to service that debt and feed themselves and everything else and the wages here don’t support it. We certainly had people who couldn’t take jobs with us because their debt load from both undergrad and grad school was so high. But they’re in a tough spot. Even if you go to Boston, get a job that pays 20 to 30 percent more, then you’ve got to try to then find how to live there.
Rochon: And that’s why a lot of the kids live at home. They don’t just boomerang back to the state, they boomerang back to mom and dad’s because how do you come out of school with that debt and still buy groceries that doesn’t have ramen noodles in it?
Dargan: I know Dover is looking at accelerator space — building 10, 15, 20,000 square feet that’s flexible for startup companies — very young, early-stage companies — to come and have the room to grow.
NHBR: What kind of relationship does this region have with the rest of the state?
O’Connell: I’m in my early 50s, and I’ve pretty much lived here my whole life. For those of us who pick up the Business Review or the Union Leader, some of the more state-based publications, it does feel as though the media in the state has treated the Merrimack Valley, the 93 corridor, as the epicenter of the state. There are a few outliers — which would maybe be the Monadnock Region, certainly us here, and maybe the Upper Valley — which are islands. There is an isolation to it, but it doesn’t mean we don’t succeed; we succeed very well.
In terms of integration with the state, people think, “Well, New Hampshire is Manchester.” But I’d like to think we’ve got a lot going here. I’ve said it to a lot of folks who show up from the media: I love seeing you over here in Dover. I think our footprint has become bigger, a bit louder if you will, within the state economy. Pease is certainly the driving force behind that for so much of the people working here. So we’ve gotten more attention, but there’s kind of a long history of doing our own thing in the Seacoast, largely unrelated to what the rest of the state does.
Hodgson: I have had the benefit of working for three statewide organizations. I was the director at NH Made, I was the director of NH Businesses for Social Responsibility and I was at NH Public Television. And when I came back to regional work and started at the chamber, I actually started to pick up on this a little bit more.
Perhaps it’s incumbent on us a bit to make sure that we are loud and to make sure that we are heard and make sure we send you our news and make sure that we’re taking part in the conversations statewide. We’ve touched upon the fact that we’re such a region, so we’re kind of in our own little hub here. I guess I would say to take the initiative to make sure that you will hear our message and what’s happening in this part of the state.
Deroy: It’s an obligation to be proactive. But we have to reach outside of ourselves here if we want to tell other people what’s going on.
Rochon: I’ve had the reverse experience when I spent a summer in Concord in a study committee about reallocating meals tax or empowering communities to generate their own fees. With what Portsmouth generates into the economy, Portsmouth gets back $1 million of the estimated $30 million that we send over to Concord. That’s not really fair. And what I got was, “Oh, you’re Portsmouth. You don’t need it.”
Dargan: You have to look at the investment that the Seacoast has made in Pease. When that was an Air Force base, the investment, the time and effort that was put forth there, and Dover’s Enterprise Park and Rochester’s Skyhaven office park, those were done 25, 30 years ago. Those were available for development for manufacturers and that created jobs.
“Pease will be built out. We have 11.2 acres left … We're at 10,2050 jobs now, and I think the full buildout of Pease could be another 1,200 to 2,000 jobs easy, maybe even 3,000 jobs,” says Dave Mullen, executive director of Pease Development Authority.
I think, certainly in Dover, there’s been a welcome to downtown; they created a special zoning district where retail and first-floor residential apartments are — they’ve been really driving that for years. You’re filling it with beds, so they’re driving to the restaurants. The city took an industrial building — the mill building — which has 120 apartments with probably more to come.
NHBR: What do you think we’ll see in five years in this area, with your organizations?
Mullen: I can tell you Pease will be built out. We have 11.2 acres left. Everything is either under option or has potential for expansion. The air side is slower, but you can’t locate there unless you’re aviation-dependent. We’re at 10,250 jobs now, and I think the full buildout of Pease could be another 1,200 to 2,000 jobs easy, maybe even 3,000 jobs.
Deroy: I think that Rochester is poised very well for the future. I think that we have our infrastructure in place. I see more and more development happening, certainly from a commercial perspective, with the aerospace — they have requirements that they have to have their suppliers within a 25 to 50 mile radius. Couldn’t ask for anything better. I think that our retail is now coming up to speed, and then we are focusing on downtown. We will have that revitalized. All eyes and all efforts are on downtown in making that a showpiece.
Hodgson: I think Dover is going to continue to grow. We’re seeing a lot of urban or downtown infill. I think you’re going to see that build-up versus build-out. We also have a second enterprise park on the docket in the future for more commercial space, and I think we’re going to continue to attract young people. We’re not seeing any letup on that. I think we’re just going to be better and stronger.
Rochon: I think that so much credit goes to the progressive vision of the city of Portsmouth. There are some very smart people that have some very great vision and I think that will continue. If you look at this gateway right now, the long-term capital permit plans that the city has — building up the north end, building up the west end. I also have a great deal of respect of their vision for balance. Right now, we could be building skyscrapers or doing whatever we thought we would need to do to bring in more businesses here. It’s been done really well and carefully. Because of that vision, I see us growing efficiently and sustainably, and we’re on that path.
Carmer: In five years, we want to be a vibrant community, we want to be a resilient community and we want to be an authentic community. I will add two other things: We will add a sewer treatment plant and we will have a second parking garage. Hopefully, a grocery store downtown. To grow a talented workforce, it’s the balance; the quality of life that we currently have.
Ward: From the commercial real estate perspective, I think in five years we are going to see some great redevelopment projects that are going to result in better and higher uses of the land that we have. We’re going to see some infill projects. There are already some that are coming before the boards right now. We’re going to have continued appreciation of values.
I think we’re going to have continued insulation, which is, maybe from my industry, the most amazing thing to watch on a year-to-year basis — the amount of insulation this sub-market in Portsmouth and the surrounding towns have. And we’re going to convince (Portsmouth City Manager) John Bohenko to stay another five years. I give John a lot of credit; he’s a good shepherd of the city.
Connell: Before I came here today, I was meeting with a client to decide whether to build a new building in Rochester, they’re a small manufacturer, or to buy one in Somersworth. They’re all high-quality issues. For the most part, we’re not dealing with anyone in any kind of crisis, but what I’m seeing is all positive. It’s buying and selling. We’re adding space, building space; it’s not debt-restructuring. If the question’s five years, I really don’t see that changing substantially in that time. I just see improvement.
Dargan: I just think there’ll be continued growth. I wish I had magic words here, but it’s just been a great ride. I’ve been on the Seacoast for 30 years, lending for 30 years. There’s been a few dips, but there’s been a lot of good things going on to look forward to.
Deroy: We’re survivors.