The business of Maine’s coast From Calais to Rockland: Making sense of economic changes

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The 21st century may have started on the wrong foot, but mounting evidence suggests the U.S. economy is poised to improve and that job cuts and recession could be settling into the past.

How has the Maine coast fared? Beyond the booming real estate market, the four-year downturn has had mixed impact on the state’s saltwater economies.

In some cases, vital businesses managed to expand and large-scale building projects were completed or are under way. Other businesses failed and jobs were lost, pushing some coastal Ztowns further along in the transition from fishing and manufacturing to harvesting the tourist’s dime.

Local chamber of commerce leaders find themselves invariably near the center of that change. They keep tabs on comings and goings among businesses and often play a role in determining what comes next.

Interviews with chamber leaders in a handful of towns provided perspective on their communities: What do they see as their core challenges and prospects, and how have they weathered the blow?

Bar Harbor

The local joke says you can’t buy a pair of underwear in Bar Harbor, and there’s more than a little truth in the jest.

The annual surge from 4,500 year-round residents to 22,000 property owners during the summer and nearly 3 million visitors to Acadia National Park blasts the July-through-September sales season into the stratosphere.

It makes Bar Harbor in some ways the envy of the coast. Chamber of Commerce Executive Director Clare Bingham says it also continually forces the town toward a part-time, trinket-driven economy.

“When you have a three-month season and a $40,000 a year [business] mortgage, the pressure is to stock items you can mark up 10 times,” Bingham said.

T-shirts, coffee mugs and lobster key chains are the sure bets to pay the bills. More diverse offerings, such as staple goods (including BVDs) that would support a year-round community, often don’t pass the profit margin muster.

But Bingham reports 50 percent more shops are staying open year-round compared to a few years ago, helping the town move toward its goal of a seven-month season. The local economy dipped briefly after Sept. 11, 2001, but otherwise saw little effect from the national recession. The area’s largest employers, Jackson Laboratory and boat builder The Hinckley Co., expanded during the slump, and retail stores had a record-breaking 2002.

The year-round Morang-Robinson Ford dealership closed on Main Street and was quickly replaced by the seasonal, 71-room Bar Harbor Grand.

At least one other year-round business, Royal Greenhouse on Pine Street, also shut its doors. Of vital concern are the escalating property values continuing to ratchet up housing costs on the island.

“A lot of people benefit from Acadia,” Bingham said. “But Bar Harbor bears the full cost.”

Rockland

When Ames Department Store packed to leave Rockland last year, Bob Hastings adopted a tone less taken by chamber of commerce executives.

“I said good riddance,” Hastings said. “It was a really crummy store. They didn’t provide good jobs and, as far as I could see, they weren’t really an asset to the community.”

The loss of Ames and the closing of sports apparel maker Nautica Enterprises’ plant earlier this year sucked nearly 450 jobs from the town of 8,000.

But Hastings knew scores of new and, he thinks, better jobs were on the way.

Retailers T.J. Maxx and Staples both opened stores on Camden Street in the past month. A Home Depot is set to open soon across the road, and Hastings sees two to three more national retailers coming in the near future.

But the Knox County seat is in the midst of a change-up that goes well beyond big retailers. A waterfront once rimmed with fish factories and bars is now host to crowded summer festivals and a growing number of marinas and popular museums.

Credit provider MBNA Corp. and Fisher Engineering are Rockland’s largest employers. But the crux of the change has been the Farnsworth Museum, where a $1.5 million renovation jump-started the moribund economy in 1994.

The addition of the Wyeth Center Gallery furthered that success in 1998. The town plans to build on that theme with a $2.3 million Gateway Center, a project designed to coax upscale developers to the waterfront. Plans include a $1.4 million Maine Lighthouse Museum to house the town’s elaborate collection of lighthouse lenses.

And what are Rockland’s problems? The town needs more hotel rooms, as well as affordable housing, Hastings said. But what about Main Street, which has only two vacancies, both because of leasehold problems, but has some merchants who are worried about the impact of big-box retailers on the community of small businesses.

Hastings says there is a danger for businesses too staid to change their ways.

“It’s the reality of the marketplace: Smart retailers can adapt and will adapt and do just fine,” he said.

The Chamber leader says the big national chains can’t compete with the downtown ambience, and predicts an eventual balance in which the moms-and-pops and Wal-Marts of the world complement each other.

Ellsworth

Ellsworth is a critical crossroads for tourists en route to Bar Harbor and Acadia National Park, and its traffic problems are of local legend. When tourists gridlock with commuters headed to Mount Desert Island or Bangor, Chamber of Commerce Executive Director Mickey Sumpter can read drivers’ lips from her office.

There should be no shortage of reading material next spring, when the Department of Transportation begins a $3.5 million project to rehabilitate the town’s main drag.

Ellsworth was never quaint, Sumpter said. A diverse, working-class community scattered over miles of countryside, its Main Street suffered through a transition in the 1980s after stores such as Newberry’s and Stratton’s closed their doors. Renys and Wal-Mart touched down along High Street in the early 1990s. The Home Depot set up shop in 1991.

The recession here has been visible, Sumpter says, but the effects have been manageable. The Ames store closed in the Maine Coast Mall in 2002. Marden’s moved into the space a year later. Penobscot Bay Ace Hardware closed on High Street, followed by Aubuchon’s on Route 1 in Hancock. Almost 50 jobs were lost when sign maker Display Concepts folded in nearby Trenton last year.

Traffic through town nevertheless increases 3 percent a year, and Sumpter sees more chain retailers on the way. The town’s biggest challenge is that affordable-housing developers have been building for the more affluent.

In her eight years as director, Sumpter has watched businesspeople and the City Council gridlock on issue after issue. But new faces and attitudes, along with the High Street face-lift, could lend to change.

“There is a team approach here that there hasn’t been for a long time,” she said.

Machias

The view is unbeatable from Louise West’s office next to Wall’s appliance and TV shop. The Machias River pours past her back doorstep. Eider ducks angle along the shore.

The business outlook for Machias, where West was named Chamber of Commerce director in August, is less restful. The seat of Maine’s hardscrabble Washington County, Machias has struggled to retool an economy abandoned by sardine processors a decade ago and by the closing of nearby Cutler Naval Communications Base in 2002.

Washington County’s unemployment topped out above 12 percent during January and February, the highest in the state. West nevertheless thinks the four-year recession went easy on the town.

Yes, Elmer’s Discount closed and vacancy rates are running between 10 and 15 percent. But Machias also has seen major improvements. The 1,000-student University of Maine campus built a $3 million dormitory. Sunrise Opportunities opened its half-million-dollar Kay Parker Center in March. Crews working on a DOT bridge project slated for completion this winter helped keep hotels and restaurants busy.

A handful of smaller businesses: the Shake Pit, Wheeler One ATV parts and service, the Machias Animal Hospital and Designs by Aaron jeweler opened up shop in town. Tickle Trunk, Raven, Mud Alley Cafe, Silk Purse and Robin’s Nest all upgraded to new space.

On a larger scale, federal funding this fall allowed Superlative Technologies, known as SuperTek, to expand its naval benefits call center to a total of 32 workers.

The struggle for Machias is to appear vibrant. The university, hospital and Sunrise Opportunities attract clients from as far as Lubec and Harrington. They also lock up nearly 40 percent of the town in tax-exempt property, limiting the tax base.

That balance will tip further next spring, when crews break ground for a $4 million, 30-bed veterans care facility that will increase the value of Down East Community Hospital.

Machias’ greatest boon may lie in the wild blue. In August, the first Machias Blueberry Festival drew larger than expected crowds. In October, a state-federal partnership pledged $7.8 million for up to 31,000 wilderness acres along the Machias River, preserving what West sees as one of the town’s most powerful draws.

“If you were standing here in front of my office in the summer,” she said. “I’d bet my eyeteeth there is a kayak on every other car.”

Camden

Recession or no, Camden is a small town at the top of its game. Its name recognition rivals the most popular destinations in the East.

Even after December, when the winter slump hits and tourist destinations go dark, Camden still perks.

The town is home to 5,000 residents year-round. Another 7,000 homeowners spend portions of the year in town. A bulwark of century-old businesses, including Camden National Bank, P.G. Willey & Co. gas and oil, French & Brawn Marketplace and Wayfarer Marine, anchor the economy.

Chamber of Commerce executive director Andy McPherson reports no significant business closings during the downturn. Many businesses have changed hands, particularly among Camden’s active bed and breakfast segment.

But credit card lender MBNA Corp.’s Mechanic Street offices cut its work force there by 20 percent, to 400. It also created a commercial real estate gap – easy enough to fill, but also enough to remind many that Camden was not always a coastal jewel.

The gradual demise of tannery and textile mills beginning in the 1970s threw Camden’s economy into shambles.

The town managed to rebuild and ably adapt both to summer tourism and to year-round customers. Tourist visits are down slightly since the recession, McPherson said, and concerns over large-box retailers in nearby Rockland are on people’s minds.

Echoing concerns of other chamber leaders along the coast, McPherson said the most critical hurdle to sustaining Camden’s success is the need for affordable housing. Filling the 45,000 square feet of office space vacated by MBNA also is a crucial step to keeping Main Street vibrant. But addressing the needs of wage earners who drive Camden’s sense of community is vital, he said.

“If we get to a point where the people who work in and service this community can’t survive here,” he said, “what have we really accomplished?”

Calais

Business in Calais recently perked up, due in large part to deficit spending. When the U.S. budget deficit rises, foreign currencies such as the Canadian dollar tend to gain on the U.S. greenback. That process is coaxing Canadians back across the bridge into Calais.

“When [the Canadian dollar] is up, business is good,” said Keith Guttormsen, executive director of the Calais Regional Chamber of Commerce. “Right now it is 75 cents on the dollar, and Marden’s and Wal-Mart were packed last weekend.”

When the U.S. economy tanked in the early 1990s, Guttormsen said, Canadians poured across the border to Calais. Businesses suffered through the poor exchange rates of the 1990s, however, and after the Sept. 11 attacks, the border snapped shut. It was a big hit, Guttormsen said.

Calais felt the national recession this time around. Ames left but Marden’s filled the space some months later.

International telemarketer ICT Group Inc. closed its North Street call center in March, putting 80 employees out of work. It’s still vacant.

The nearby pulp and paper products mill in Baileyville, owned by forest products giant Domtar Inc., closed from early June to mid-July, leaving 520 workers without more than a month’s pay. Louisiana-Pacific’s Baileyville mill reopened in July after a 10-month shutdown. It closed up shop again just before Thanksgiving, idling 99 workers.

Cutbacks in state construction in Washington County caused another large employer, builder Thomas DiCenzo Inc., to cut its year-round work force of 150 to approximately 58 winter and 100 summer employees.

The Calais Regional Hospital, which remains Calais’ largest employer with 220 full- and part-time employees, is pursuing a $15 million plan for a new building.

The area has gained jobs through the U.S. Customs office, which re-formed as the Bureau of Customs & Border Protection and more than doubled its Calais operation to 70 agents after Sept. 11. The office’s Border Patrol won’t divulge how many agents it employs in the area but says the number increased by roughly 50 percent.

A Family Dollar Store recently opened on North Street, but the biggest potential boost could come from the Downeast Cultural Heritage Center. The $6.2 million federal-state venture hopes to draw, in concert with the 400-year old settlement site at St. Croix Island, as many as 90,000 visitors a year.

Belfast

When Stinson Seafood closed its Belfast sardine processing plant in September 2001, it sent 80 employees packing just as a national recession kicked into gear. It also capped a 20-year-long industry pullout that drained 2,000 jobs from an economy once bristling with shoe factories and chicken processing plants.

Belfast has since managed to rebuild its downtown image with small shops, restaurants and galleries that leave nary a vacancy along Main and High streets. Despite the national slowdown, Belfast has kept on track. It now is tuned to its Passagassawaukeag River waterfront and to a bay that once was neglected and “full of chicken feathers and entrails,” newly elected Chamber of Commerce President Mary Mortier said. A $3.5 million project is under way to restore the 1,000-foot pedestrian bridge that spans the river. A private developer is also negotiating a $10 million proposal to turn the vacant Stinson Seafood plant into waterfront restaurants, retail shops and housing.

Other than Ducktrap River Fish Farm and its 145 workers, all of Belfast’s large employers are landlocked. They include credit provider MBNA Corp. and the Waldo County Healthcare Association. Mathew’s Brothers Co., a 150-year-old window and door maker, has about 110 employees. Architectural fabrics maker Moss Inc. employs 131 at its Northport Avenue plant.

Three different day-cruise ships now sail out of the harbor, and American Cruise Lines Inc. makes the town a regular summer destination. The Stinson plan proposes approximately 250 boat slips.

Nearly all of the town’s 6,500 residents are year-round, though rising housing costs are making it tougher for many wage earners to call Belfast home. Many residents remain wary of development projects that they see as threats to the town’s charm. It was a sentiment made clear in 2001, when the community thwarted stores such as Wal-Mart and The Home Depot by voting to limit retailers to less than 75,000 square feet. A similar bent has been apparent in the cautious approach to the potential Stinson project.

It’s a fine line to walk and not be labeled as anti-business. But Mortier says it simply shows the town is not willing to favor large business over small.

The upside:

Projects that promise a near-term economic boost

Calais: $6.5 million Downeast Cultural Heritage Center

Machias: $4 million

Veteran’s Center

Ellsworth: $3.5 million in High Street Improvements to begin

Belfast: $3.5 million rehab of pedestrian bridge

Rockland: $2.3 million Gateway Center/Lighthouse Museum to open June 2005

Camden: Sale and pending development of Apollo Tannery on Washington Street.

Chambers of commerce:

By the numbers

Calais 140

Machias 120

Bar Harbor 342

Ellsworth 500+

Belfast 260

Rockland 635

Camden 676