Vermont’s Northeast Kingdom | Change Coming to the Kingdom

Millions of dollars from foreign investors are pouring into Vermont’s Northeast Kingdom. What that means for the region is anyone’s guess—except that it will never be the same.

By Ben Hewitt

Feb 19 2014

Photo Credit : Michael Piazza
Cavan Meese parked the golf cart in the middle of the airport runway, leaned back in the seat, extracted a pouch of American Spirit tobacco, and commenced to hand-roll a cigarette with the confident dexterity born of experience. “Just keep an eye up, okay?” he said as he rolled, and I wasn’t sure whether he was joking, or whether the risk of incoming aircraft really was sufficient to warrant visual monitoring. I thought the former more likely, but when you’re sitting in a golf cart parked in the middle of a runway and your driver suggests that you “keep an eye up,” you darned well better keep an eye up. Not that danger felt imminent. The runway upon which Meese had parked the cart was a vacant, windswept thing, laid across a vacant, windswept field on the outskirts of the small town of Newport, Vermont, so close to the Canadian border that a Quebecer with a keen nose could probably catch a whiff of the smoke rising from my companion’s cigarette. The airport itself was a modest affair; located across the road from a dairy farm, it consisted of two runways, a row of boxy, metal-sided hangars, and a terminal that was perhaps 20 feet square. There was one plane in sight, a small two-seater parked near the terminal. A man was washing it by hand; he was the only other person in sight. A scant half-mile to the north lay the regional dump. All of which is to say, it seemed to me a most unlikely spot to open a restaurant, which is exactly what Cavan Meese had done in one of the hangars at the runway’s edge. Parker Pie Wings is what he’d called it, and its grand opening had begun only an hour before we climbed into the golf cart. The restaurant was an informal pizza-and-beer joint modeled after the Parker Pie Company, his informal pizza-and-beer venture a dozen miles to the south, in the sleepy hamlet of West Glover. As I was learning, Cavan Meese was an informal pizza-and-beer sort of guy. “A lot of smart people who are looking after my best interests are asking me, ‘Do you really think that airport has enough traffic to support a restaurant?’” he told me as we sat on the vacant runway. It was quiet and cool in that way early August can be, a subtle foreshadowing of the months to come. “And I say to them, ‘No, not in the least.’” He chuckled in the rueful manner of a man who knows the joke may yet prove to be on him. He took a drag from his cigarette and sent a stream of smoke into the air. “Nope. Not in the least.” Ah, but Cavan Meese is being too modest, because he knows that the quiet airport just outside Newport, Vermont, where one can currently park a golf cart in the middle of a runway and casually roll a cigarette without fear of being landed upon by an airplane or so much as interrupted by another living soul, is about to get a whole lot less quiet. Cavan Meese knows that sometime over the next year or so, construction crews will arrive. He knows they will extend the runways to the 5,000-foot minimum necessary to accommodate most private jets; he knows they will construct a new terminal and new hangars. He knows that soon an aviation company will locate at the airport for the express purpose of building cutting-edge composite aircraft in a brand-new 50,000-square-foot facility. And he knows that all this activity will bring engineers and building crews. It will bring paving companies and airport personnel. It will bring bystanders and onlookers. Someday it may even bring passengers. All of these people, Cavan Meese knows, will at some point in their day become hungry. And when they look around, what will they see? Parker Pie Wings’ big logo affixed to the side of a former aircraft hangar—that’s what they’ll see. “Everybody likes pizza,” he tells me, and he chuckles again, but this time, not ruefully. Even as he says it, I can feel a grumbling in my stomach begin.

The expansion of Newport State Airport, ambitious as it sounds, is but a slice of the pie known as the Northeast Kingdom Development Initiative. The project is so ambitious, so outsized and fantastical, so multifaceted, and so subject to the whims of money and fancy that simply explaining it feels almost burdensome. Oh, sure, the broad strokes are easy enough: Over the next few years, if the plan unfolds as predicted, more than $600 million will flow into one of New England’s poorest regions. The money will be splashed across a multitude of enterprises, including (but not limited to) a biomedical facility and “research park,” the aforementioned airport expansion and aviation manufacturing facility, a waterfront marina and conference center, a reconstructed city block with retail and office space and short- to medium-term rentals, and an expanded ski resort. In total, the initiative is expected to create approximately 10,000 jobs in a region where the labor force is estimated at 30,750 people. To understand how such a thing could come about in a rural area that has long suffered from high unemployment, low wages, and a general sense of chronic economic malaise, you need to understand a bit about a program known as the EB-5 Immigrant Investor Visa. EB-5 is a federal program that removes pretty much every barrier to U.S. citizenship except one: money. Under the basic EB-5 program, would-be U.S. citizens can earn a green card simply by investing $1 million in a new commercial enterprise that leads to the creation of 10 or more jobs. But under the EB-5 program that will potentially change the face of Vermont’s most remote region, that barrier to entry has been lowered significantly. That’s because the NEK has been identified as a “Targeted Employment Area,” which basically means that the need for capital and jobs is great enough that additional inducements are justified. Those inducements include cutting the investment requirement in half, to $500,000, and the creation of an EB-5 Regional Center Program that allows investors to be limited partners in an enterprise. It also allows the 10-job minimum to be met through “indirect employment”; in other words, a job created at a local convenience store to serve the increased demand for gasoline and Cheez Doodles owing to the opening of a new manufacturing plant becomes a viable part of the count. Today, there are EB-5 projects underway in all 50 states across the country. So yes, the EB-5 program is an essential component of the NEK Development Initiative. Without it, there would be no talk of that $600 million river of cash and of the 10,000 jobs it carries. There would be no talk of a luxurious resort hotel and conference center, upscale restaurants, and gleaming biomedical facilities in the Vermont city saddled with the state’s highest unemployment rate. There would be no talk of change and progress, of opportunity and transformation, of prosperity and upward mobility. There would be no talk of turning the aforementioned town—Newport—into a destination for vacationers from across the U.S. or even the world, or of waking up the sleepy Burke Mountain ski resort with a $160 million infusion. Without EB-5, there would be no talk of any of this, because there would be no money. But responsibility for the expected surge of economic activity in the Northeast Kingdom, and the sense of anticipation that builds as individual projects are revealed and solidified, cannot be laid solely at EB-5’s doorstep. Because no matter how favorable the terms, money does not just happen. Investors do not just arrive, bearing briefcases full of cash; they must be courted and wooed with plans and promises. A vision must be put forth and promoted, not only to those investors, but to the general public, those who make their lives in this flinty corner of New England and who have come, in ways both large and small, to embody the very character of the region: independent and proud, determined and capable. There must be someone to explain all of this, to make it clear, to give it shape and context. There must be someone to dispel fears of gentrification and inequality, to assure and assuage. There must be someone who is believable and experienced, who has a reputation for doing what he says he will do, when he says he will do it. There must be Bill Stenger.

I first met Bill Stenger in late August, when I attended a community forum on the waterfront in downtown Newport, but his name had long been familiar to me. Indeed, Stenger’s name is familiar to just about anyone tuned into development—economic and otherwise—in the Northeast Kingdom. Living in Cabot, Vermont, I can’t claim Kingdom residency, but I’m darned close: The Northeast Kingdom comprises Essex, Orleans, and Caledonia counties, the latter of which lies only a few miles north of my family’s home. Given this proximity, and my general fondness for the region, I’ve long maintained a keen interest in “the Kingdom,” as it’s known in local parlance. For the past 30 years or so, Stenger has been inextricably linked to Jay Peak Ski Resort. He became Jay’s general manager in 1984 (he’s now part-owner), coming to the mountain at a time when it boasted all of 48 guest beds, a primarily Québécois customer base, and a reputation as a snowbound backwater of a resort that, depending on your perspective, was either too far, too cold, or too bereft of amenities to warrant visiting. For a couple of years, Stenger was content to simply learn the ropes, but he was also quietly looking for a way to distinguish the resort from its competitors, a mandate that was particularly crucial, given Jay’s remote and rustic nature. Stenger found his opportunity in the aftermath of a benchmark liability case, following a 1974 accident at Vermont’s Stratton Mountain in which a skier clipped a snow-covered stump on the trail’s edge, fell, and suffered shoulders-down paralysis. “All the resorts started making their trails wider and wider, because they were afraid of getting sued,” Stenger explained. In the mid-1980s, Stenger happened upon one of his patrollers admonishing a group of skiers who’d been skiing off trail, in defiance of mountain policy. “I couldn’t forget the smile on those guys’ faces,” Stenger told me. In fact, the image of those skiers—clad in snow-crusted woolen pants, faces split by snow-crusted smiles—was so unforgettable that it wasn’t long before Jay became the first Eastern ski resort to adopt a boundary-to-boundary policy at precisely the same time the competition was cracking down on off-trail antics. The decision cemented Jay’s sterling reputation among serious skiers, securing in the process Stenger’s reputation as someone who wasn’t afraid to call conventional wisdom into question. Still, the resort’s infrastructure shortcomings persisted into the 21st century, when Stenger began courting investors through EB-5. He’d first learned of the program in 1996 (it was launched in 1990), but it wasn’t until 2006, when EB-5 was streamlined, that Stenger began to market Jay to would-be citizens with deep pockets. Suddenly, Jay Peak was awash in money from foreign investors seeking a shortcut to the green-card avenue. Before long, Stenger had raised $330 million, enough to utterly transform the ski area. Among other amenities, a brand-new 172-room resort hotel was completed in 2011, shortly after the resort’s pièce de résistance—a glassed-in 50,000-square-foot indoor water park known as the Pump House—opened. The park, which is heated to a balmy 86 degrees year-round, features a retractable roof, a continuous-wave machine, a 65-foot 45-mph trapdoor freefall tube called La Chute, and innumerable water slides that curl and curve and dip like oversized snakes. The Jay Peak expansion did more than transform the resort from a rugged skier’s mountain into a four-season family destination: It put Bill Stenger on the map as someone who wasn’t afraid to make bold pronouncements and then actually fulfill his promises. The audaciousness of the Jay Peak development was only compounded by the fact that most of it was implemented during 2008 and 2009, when practically every other commercial development project in the country had ground to a halt, courtesy of frozen credit markets and wary investors. The rapid deployment of Jay Peak’s expansion, coupled with Stenger’s evident skills as both pitchman and developer, did something else: It created a backlog of willing investors. In short, there was more cash than the resort itself could absorb. “Simply from a logistical standpoint, it couldn’t all be Jay,” Stenger told me. It didn’t take him long to identify a likely sponge to absorb the undammed river of money flowing through EB-5. It didn’t take him long because, in fact, he’d lived there for the past 30 years: Newport.

The city of Newport, Vermont, sits tight to the southernmost shore of Lake Memphremagog, a 39-square-mile, 350-foot-deep lake bisected by the U.S./Canada border. The city’s Main Street parallels the shoreline, along a business district that comprises three blocks and numerous shuttered storefronts. A quarter-mile or so east of downtown, the metal latticework and storage silos of a local animal-feed mill lend an industrial feel; on the hill above Main Street, the twin stone steeples of St. Mary Star of the Sea preside. The downtown is pleasant and accessible, and, despite the abundance of darkened windows, it seems lively enough. Still, statistics point to a city in decline. In 2011, Newport was home to 4,579 residents, which means that since 2006, the city has lost nearly 12 percent of its population. This is perhaps in no small part because Newport’s unemployment rate is persistently higher than the Vermont state average; at the time of my reporting it was a full 28 percent higher. That wasn’t always the case. Indeed, in the early 1900s, Newport was a vibrant destination town, served by rail lines and home to a rollicking dance hall and luxury hotels. “People say this development is something new for Newport,” Scott Wheeler told me, when I met him and his daughter Emily for lunch on a hot late-summer afternoon. Wheeler grew up in the area, and publishes Vermont’s Northland Journal, a monthly periodical he proudly described to me as “the history of the region told by the people who lived it.” He also hosts a weekly interview talk show on the local radio station, WIKE 1490AM. As such, he has evolved into the role of unofficial regional historian. It’s a role that suits him: He’s effusively friendly and possesses a seemingly encyclopedic memory for historical fact, and his enthusiasm for the region and its stories is palpable. “Now, there’s a story nobody’s written,” he excitedly told me more than once. “Well, wait a minute,” Wheeler continued, drawing out his vowels in the manner of the regional dialect. “We had the Memphremagog Hotel, which burned in 1907. We had the Inter­national Club, which was one of the largest dance floors in the Northeast. All the big bands played there on their way between Boston and Montreal. Newport had a nice, booming downtown.” He paused for a moment, then asked rhetorically, “Does anyone even dance anymore?” His daughter Emily piped up. “I have one friend here,” she said. “The rest of them have left.” In fact, she too was about to leave, to return to grad school at UVM. “Would you come back to the Newport area?” I asked. Emily shrugged. “I don’t know,” she said. “It’s a great place to raise a family, but there’s a stigma about staying here. It’s like, if you don’t get out after high school, you’ll never get out.” Scott Wheeler looked at his daughter. “You could make a living here, but it’s tough, ain’t it, for kids.” It wasn’t a question, and he nodded, a silent answer to the question he hadn’t really asked, because of course everyone knew the answer anyway. At the community forum I attended—one of a series of facilitated, open-to-all gatherings intended to provide residents with a real-time grasp of the development and its potential opportunities and consequences—chairs had been arranged in a large circle, part of the facilitator’s intent to democratize the gathering. This wasn’t supposed to be Bill Stenger’s show; it was supposed to be the people’s show. But despite this effort, and despite a strong turnout of 60 or more, and despite the fact that a dozen or so attendees stood in the back of the room, two seats remained empty: One was to the left of Stenger; the other was to his right. Despite this separation, it quickly became clear to me that Stenger enjoyed a high level of respect and perhaps even reverence among the assembled crowd. “You, sir, are the answer to a lot of people’s prayers,” said the pastor of a local church, when it came his turn to speak. “Thank you for your courage and honesty,” said another man. “If all this is only a fraction as successful as the water park at Jay, there’s going to be a gold mine in Newport,” commented a middle-aged fellow dressed in business casual. A soft chuckle ran through the crowd, and heads nodded in agreement. Outside the tall windows of the meeting space lay the vast blue-gray expanse of Lake Memphremagog. Despite the halcyon weather, the lake was practically devoid of human activity. There were no boats in sight, no fishermen, no jet skis, no swimmers. This didn’t escape Bill Stenger’s attention. “Look at that lake,” he said, nodding toward the sun-washed water. “There’s not a boat out there. It’s nuts.” I gazed out at the water, squinting into the late light. I saw some birds—gulls, probably—circling, and I watched the lake surface shimmer under the waning sun. For a moment, the room fell quiet as everyone gazed at the lake, and I had to wonder whether they saw the same thing I did: The sun on the water looked just like gold.

One morning not long after the meeting, I stopped at Brenda’s Homestyle Cookin’ on Main Street in Newport. I took a seat on the long padded bench that lines an entire wall; through the window, I could see across the street to the recently opened Northeast Kingdom Tasting Center, a showplace for the region’s artisanal food and beverage producers, where you can purchase a liter bottle of ice cider for $29 or a small wedge of blue cheese for half that much. On the television mounted on the wall across from me, Dr. Phil was helping some hapless soul navigate an abusive relationship. In one corner, an employee was stacking coolers with prepared meals; Brenda’s distributes nearly 500 of them across the community each week as part of the Meals on Wheels program. I heard someone ask what the lunch specials would be, and I heard the reply: meatloaf and rice, and hamburg in pasta. I ordered a $4 plate of sausage gravy over biscuits and was soon joined by the restaurant’s namesake, 66-year-old Brenda Lepage. She sat across from me, wearing an apron and a pair of sanitary food-prep gloves, and spoke quietly about what she saw happening in her hometown. “It’s a little scary to me,” she admitted. “What they’re proposing is a heck of a lot different than what we’ve had.” “What’s scary?” I asked. She thought for a moment. “It might be too upscale for some of the locals,” she replied. “And it sounds selfish, but every time I turn around, there’s a new restaurant. In the front of my mind”—she gestured to her forehead with a gloved hand—“is how I’m going to compete with all these new businesses. Yes, there are going to be jobs. Yes, there’s going to be money. But for whom?” She sighed. “We need the jobs; I know we need the jobs. I guess what’s good for Bill Stenger will have to be good for Newport.” It wasn’t the first time I’d heard that sentiment. The notion that Newport’s impending development—and, by extension, the various projects comprising the NEK Development Initiative—might not bring prosperity to all is perhaps the most common criticism leveled at Stenger and his ambitions. In the absence of hard data on the precise breakdown of potential jobs, there’s plentiful speculation that the majority of the employment will fail to meet livable-wage standards. “America is littered with stories of corporations saying, ‘We’re going to be good for the town,’ and then being anything but good,” Pat Sagui told me. Sagui resides in nearby Westfield, where she provides project management and development services for small nonprofits. She’s one of the few outspoken critics of the NEK Development Initiative I came across. In Sagui’s view, the development associated with the initiative fails on several fronts. There’s the fact that most of the development is highly energy-intensive, both in its construction and its end use. (Electricity consumption at Jay Peak is projected to increase by more than 300 percent once the development is complete.) “Unless this can be done with a zero-carbon footprint, there’s really nothing to be proud of,” she told me. And she echoes Brenda Lepage’s concern that many of the highest-paying jobs will require education and training that are beyond the reach of many area residents. In short, Sagui sees the Northeast Kingdom Development Initiative as rooted in resource consumption and service-sector employment that traditionally hasn’t provided a livable wage, while ignoring fundamental ecological realities. “How do we make decisions about what’s good for our communities?” she asked. “First and foremost, a new development project should pass the consumption test. If development doesn’t fit the steady-state-economy model, then it’s beyond the carrying capacity of the planet. Second, it should answer the question: How will this make us more resilient to climate change and to economic uncertainty beyond our community’s borders? Bill isn’t offering anything visionary here.” Despite Sagui’s critique, the overarching mood in Newport and the region at large is one of tempered excitement and cautious optimism. At Wright’s Enterprises, I sat in the cluttered office of auctioneer Ron Wright, listening while he alternately held forth on the pending development and swatted flies with enviable accuracy. “I’m all for it if they can bring more jobs and more people into the area,” he said. He paused, and the swatter found another victim. “The biggest thing we need is more jobs and more people.” Swat. At Brenda’s Homestyle Cookin’, I chatted with server Tim Daley. “The things that are coming along are really good,” he told me. Daley owns a house and feels optimistic that development would bode well for home values and community vitality in general. “Our neighborhood is becoming the historic district,” he said excitedly. “It used to be a drug neighborhood, but now it’s becoming a little more gentrified.” He pointed across to the Tasting Center, which was bustling with visitors sampling artisanal wares. “The local people say, ‘It’s expensive.’ And they’re right. But what it does is bring in the people who find it not so expensive. And they look around and say, ‘What else does this town have to offer?’” And sitting at the Vermont Pie & Pasta Company with Scott and Emily Wheeler, I listened as Scott summarized his feelings regarding the impending transformation of his hometown: “This is a place where people realize that happiness can’t be found in a wallet, and I don’t want us to lose sight of that. Tell you the truth, I feel like I’m caught between two worlds. I like the world I grew up in—hardworking, poor, but honest. I love the world I grew up in. But we do need change.” He leaned back for a moment, as if reflecting on what all of this really means: “We’re changing for the good, and we’re changing for the bad, but history is neither good nor bad: It is what it is.” Emily rolled her eyes; she’d heard this particular speech more than once. “One thing’s for sure,” Wheeler added. “Whether you like it or not, we’re at a turning point, and it’s more important than ever to record the stories.” He grinned hugely and picked up his sandwich.