Economic Development Plan
Creating Opportunities: Priorities and Strategies

Financing and Technical Assistance to Small Businesses

The regional and state economies continue to be significantly dependent on IBM. On the other hand, small businesses are a major job generator, and the City will continue to nurture and support the small business sector.

The startup and expansion of small, high-growth companies in Burlington is still constrained by a lack of small-scale risk capital financing. The Community & Economic Development Office should identify and work with local investors (including the Key Bank and the Vermont Venture Capital Network) and the non-profit community (including the Vermont Community Loan Fund, Vermont Development Credit Union, Coastal Enterprises Inc., and the National Trust for Historic Preservation) to create a locally and regionally managed higher risk, capital pool. The fund could be aimed at small startup, early-stage, and financially restructuring firms and make small equity-like investments and subordinated debt financing in participation with private lenders. Investments by the fund should be tied to business technical assistance and to a clearly articulated investment strategy that is consistent with the City's overall economic development objectives.

Small businesses and entrepreneurs continue to need access to affordable gap financing, resource information, technical assistance, and training. Affordable commercial and incubator space – both downtown and throughout the City – is needed to foster new and expanding businesses. There is a need for affordable transit and parking downtown to support the growing Central Business District.

Small Business Assistance - Supporting small business development is a cornerstone of the City's economic development policy. The new Renewal Community tax incentives will supplement other assistance available through the Community & Economic Development Office. Technical assistance and small business loans are available. The Business Loan Program makes gap financing available to small businesses that are located in Burlington, with particular attention to targeted commercial revitalization areas including the Renewal Community, King Street and the South End Arts and Business District.

Commercial Space Database - The City, working closely with the commercial broker community, keeps an “Available Commercial Space Database.” Businesses can now instantly access information on nearly all of the available commercial rental properties in Burlington with one phone call or e-mail. The Commercial Space Database, which lists nearly all of the available commercial spaces in Burlington, provides a valuable—and very well received—tool for business start-up, expansion, and relocation.

Resource Guides - The City has several Resource Guides available, including “Doing Business in Burlington,” “Resource Guide for Chittenden County Employers and Employees,” “Business Refugee Resource Guide,” and “Business Location Information.” The 32-page “Doing Business in Burlington” is now in Disk format and assists new businesses in setting up, relocating or expanding. Written by an experienced business owner, it provides a practical approach to navigating city-permitting departments and offers helpful information on local resources. The City has also developed a “Business Location Package” for businesses who are interested in locating in Burlington.

Advocacy - The City regularly participates in a business call program and monthly walkabouts. CEDO regularly helps small businesses solve code violations before penalties and enforcement actions are taken, and works on issues that supports small businesses. CEDO works with the City Council, other city departments, and the business community to modernize the ordinances that regulate businesses.

Brownfield Redevelopment

The City must continue to aggressively pursue redevelopment opportunities presented by Brownfields sites throughout the City – properties that have real or perceived contamination issues from previous industrial and commercial uses. These properties are difficult to redevelop into productive use due to a range of issues: threats to the environment and human health, liability, regulatory barriers, difficulty obtaining financing, and perceptions of these sites as being permanently stigmatized. The Vermont Agency of Natural Resources’ Hazardous Sites List from January 2004 estimates that there are 58 such properties in the City.

Burlington’s Brownfields Pilot Initiative (a U.S. Environmental Protection Agency program) addresses these issues through the assessment of environmental risk and contamination in the context of redevelopment. The Community & Economic Development Office – working with nonprofit partners, other City departments, commercial brokers, developers, and the Vermont Department of Environmental Conservation - has been very successful in leveraging additional funds, and has expedited several complex transactions resulting in the redevelopment of properties long thought to be undevelopable.

Over the next several years the City will:

• Continue work on the Urban Reserve, the Moran Plant, Flynn Avenue, Pine Street, the Vermont Railway Rail Yard, and General Dynamics Armament Systems.
• Continue to identify and work on additional sites for redevelopment.

Completed projects in the City include:

• Architectural Salvage Warehouse - Abandoned building redeveloped into fully redeveloped Architectural operation
• Mill View Apartments - Former gas station into affordable housing and office space
• McClure Multi-Generational Center - Former dry-cleaning facility into senior center/ childcare/community center facility
• Vermont Transit Passenger Terminal - Former bulk petroleum facility (in Superfund Site) into interstate bus terminal
• Thelma Maple Housing Coop - Former roofing company site into affordable housing
• Metalworks - Former offices of Exxon Oil terminal into custom metal fabrication business
• Vermont Transit Bus Barns - Bus and trolley maintenance and repair facility redeveloped into 25 units of affordable housing and 15,000 square feet of new commercial space (including the new home of the Good News Garage)
• City Market - Conversion of former dairy/ice cream factory/police station into food market and offices for city government.
• General Dynamics Armament Systems - Gilbane and General Dynamics redeveloped 200,000 square foot manufacturing facility for the City’s second largest taxpayer into 50,000 of incubator space and General Dynamics leased 150,000 square feet. Five hundred livable wage jobs were preserved.

Works in progress include:

• Urban Reserve - Ongoing assessment and cleanup of former bulk oil storage facility
• Moran Plant - The subject of ongoing public discussion
• Pine Street - Potential 100,000 square foot new commercial/retail development
• Vermont Railway Rail Yard - Potential move of railway being studied; possible 13 acres freed up for mixed-use development

Creative Economy - Cultural Activities

The arts in Burlington are a vibrant and growing sector of the local economy. Efforts should be made to continue to enhance the arts as a key economic activity as well as to further enhance the quality of life in the community. The arts community and the technology community could be linked, with both sectors working together to support growth in both sectors.

Cultural activities in Burlington have been enhanced with the renovation and expansion of the Flynn Theatre (completed three years ago) and the opening of The Firehouse Center for Visual Arts in 2003. Plans for a new YMCA are underway. Main Street Landing is building a new black box theatre that will open in 2005 and movie theater that will open in 2006.

The South End Arts and Business Association (SEABA) works to enhance the economic vitality and eclectic mix of Burlington’s arts and business community by promoting the area’s unique blend of art, commerce, industry, and entrepreneurial spirit. SEABA provides the annual Art Hop, which draws thousands of visitors to the area each year and which was recognized as one of Vermont’s Top Ten Fall Events by the Vermont Chamber of Commerce.

Technology

Computer and telecommunications technologies have become critical components to the success of manufacturing service and retail businesses, both small and large. These technologies are particularly important to local businesses; with current technology, rural regions have less access to the information, ideas, and markets needed to grow, innovate, and remain competitive in today's economy, and it costs more than larger metropolitan areas. Startup and small businesses are often unable to afford the technology they need to be competitive. Along with under-capitalization, lack of adequate technology is believed to be one of the leading causes of the high failure rate among startups. There is also a need for local options for disaster recovery of information stored in computer systems.

Burlington has recently constructed an optical fiber telecommunications network connecting all schools and City government sites. The network provides high-speed data and internet services in an Ethernet environment. Voice telephone services are also being migrated over to the new network. This network has substantially greater capacity than is needed by the City, however, and therefore constitutes a significant potential asset for the community. The City is currently making this major new infrastructure available to Burlington business and continues to investigate how to make it available to residential citizens. Proposals to provide cable and internet services to citizens have been introduced.

The City should support telecommunications and high-tech business development, which offer the potential for environmentally friendly, high wage economic development. There appear to be opportunities to support at least eleven types of telecommunications-based operations, services, and products in Burlington stemming from improved telecommunications systems:

• Back-office administrative and processing operations
• Corporate professional offices
• Interactive information media
• Electronic publishing
• Distance research
• In-house telemarketing and mail order for small and medium-sized firms
• Distance learning
• Remote analysis
• Telecommuting centers
• Interactive television
• Disaster recovery

Other Targeted Industries

Home-based businesses and telecommuting are playing a growing role in the U.S. economy as advances in computer and communications technologies enable the operation of a range of service businesses and work from the home. Home-based businesses and telecommuting can minimize transportation needs while meeting income needs for residents. Work at home and home based businesses allows people who are disabled to be productive, allows people to take care of family members (aged, disabled and children) and allows people to add supplemental income. Telecommuting allows existing businesses to hire more staff without the need and expense to add their existing office space.

Sustainable business strategies can also be developed around the issues of energy conservation and climate protection. The City and Vermont Gas can provide assistance to small business owners and nonprofit organizations (including Vermont Energy Investment Corporation) to help them to improve their process control methods and to make energy improvements to their facilities while working with commercial lenders to secure their financial backing for these energy improvements. The City should also continue to support businesses developing renewable energy sources.

The use of recycled materials represents not only an economic opportunity for the City, but meets other public objectives related to diverting materials from the waste stream. For example, every year Recycle North rescues hundreds of thousands of dollars worth of appliances, electronics, computers, household goods, and furniture from landfills and continues its successful building materials reuse program while providing training and jobs for low income and disadvantaged residents. Recycle North also sells these goods at affordable rates to low and moderate-income residents.

Food waste composting is another serious solid waste problem. About 12% of solid waste now reaching landfills comes from food waste, much of which can be recycled back to the earth through composting. Burlington's Intervale is home of the first commercial-scale food waste composting site permitted by the State Agency of Natural Resources, processing about 400 tons of food waste in 1994. Regrettably, only a small percentage of that food waste came from Burlington. The City supported the Chittenden County Solid Waste District’s test program for composting city food waste at the Intervale. The City's new BE3 program will work with most of the City's restaurants and convenience stores in the next two years to reduce energy and water consumption, reduce solid waste stream, and use less toxic consumables.

Livable Jobs

The gap between what entry-level jobs pay and what it costs to live independently in the City continues to increase. According to the 2003 Basic Needs Budget calculated by the Joint Fiscal Office of the Vermont Legislature – which calculates the wages necessary to cover food, housing, child care, transportation, health care, clothing, household and personal expenses and insurance plus federal and state taxes – a single parent with one child needs to earn at least $16.74 an hour if the employer provides health benefits and $23.29 if the employer doesn’t. (In contrast, poverty level annual income for that single parent was $11,869.) The table below shows monthly basic needs budgets for a single parent with one child:

A recent Job Gap Study[1] estimated that 80% of Vermont’s single parents with one child earned less than a livable wage and that only 26% of Vermont jobs paid a livable wage for a single parent with child. (For a single parent with two children, only 16% of Vermont jobs pay a livable wage.)

The chart below compares livable wages against the average annual wage paid in a number of industries. Because the average annual wage can include both highly compensate and low wage jobs in a given industry – for example, health care includes both doctors and hospital janitorial staff – the chart gives only a rough comparison. The Employment by Industry and Gender Chart gives an idea of the number of jobs in each industry group in Burlington.

Competition for livable wage jobs at any level is stiff, and competition for low-skill, livable wage jobs is a critical problem for public assistance recipients moving into the workforce. A coordinated effort is needed to help businesses implement strategies to develop livable work. Part of that effort can be the tools described in the 80-page workbook developed by Vermont Businesses for Social Responsibility. The workbook will be updated in the coming year. The goal is to combine quality, work/life-friendly workplaces (including an attractive package of combined wages, benefits and workplace practices) and profitable, sustainable businesses.

Childcare

In Burlington, 65% of all children under six – and 75% of all children age 6 to 17 – are living with parents who are all in the workforce. (Those are higher percentages than the national averages of 59% and 67%, respectively.)

The affordability of childcare for families is a pressing issue. In 2000, the yearly median income for families in Burlington was $46,012. With one infant and one preschooler in care, a family with the median family income (MFI) would spend from 24 to 30% of their income on childcare:

As of March 2003, 426 Burlington families were using Vermont’s Child Subsidy Program (administered by the Child Care Services Division of the Department of Social and Rehabilitation Services, Agency of Human Services) to help pay for their child care costs. (That represents 729 children.) Families who are working or going to school and who have incomes at or below 82.5% of the state median income are eligible for some financial assistance for child care based on a sliding fee scale. However, the gap between market rate and the subsidy rate ranges from 19% to 34% depending on setting and age:

(Child Care Resource and Vermont Child Care Services Division)

Childcare is in itself an industry, employing over 200 people in Burlington. As of March 2002, there were a total of 150 regulated[2] child care providers located in the City of Burlington: 43 Licensed Centers, 56 Registered Homes and 51 Exempt In-Home Care providers. (That represented over one third of the 427 regulated centers and homes plus 130 legally exempt childcare providers operating in Chittenden County.) Childcare is not, however, an industry in which workers can generally make a livable wage:

It is difficult for childcare providers to sustain their businesses. Program turnover is high, particularly among Registered Home Programs. Eleven years ago, in 1992, there were 513 family child care homes in Chittenden County. In February 2003, there were 251. Seventeen percent of the Chittenden County Registered Home Programs registered in 2001 were no longer registered in 2002. Among Licensed Centers, 10% closed between 2001 and 2002; and the same number of new centers opened in 2002. Recruitment of staff is a major issue. Over the past year, Child Care Resource placed 116 jobs ads for 29 child care programs; 20 of these programs placed 3 or more ads during the year, and 9 programs placed 5 or more ads. Quality and availability of child care continues to be compromised because under-trained child care providers leave their positions to seek a livable wage.

The number of child care slots for children birth to age 5 has not increased since 1996. The drop in family home providers shifted slots to center-based care – with corresponding increases in prices for families, since center-based care runs, on average, 27% more than home-based care.

Adequate childcare is a prerequisite to labor force participation for many low-income households, and particularly for female-headed households. The increasing prevalence of families led by single women and the high incidence of poverty in such families put a premium on addressing the needs of this segment of the population – and no barrier is as great for this population as the availability of affordable quality childcare.

The limited availability of pre-school and daycare services are barriers to skills upgrading, particularly among low-income, single parents seeking vocational training and other career education. Educational institutions should review the current availability of these services in connection with adult education and training and expand these services when necessary. There is also a need to upgrade the skills of workers in the childcare industry.

Most the issues affecting the affordability and availability of childcare are state, and not local, ones. However, the City will continue to work with the childcare community to find solutions, including current efforts such as:

• Participating in the state’s Invitation to Communities planning process for child care support services
• Participating in the Early Learning Care and Learning Initiative, through which accredited childcare programs receive funding from the General State Support Grant through the public schools and schools work with providers to improve school readiness.
• Helping to explore additional funding options.

Transportation

Transportation is both a business need and a workforce need. It presents issues for those commuting into the City, for commuting within the City, and for City residents commuting to other key employment locales. It is important for moving goods in and out of Burlington and for service businesses that depend on the automobile. Having an integrated highly efficient system will help keep Burlington employers from moving to the suburbs and will allow Burlington to grow and prosper in the future.

The Burlington International Airport is the second fasting growing airport in the country. The Airport is expanding, including new service from low-cost airlines, a new parking garage, and the Airport Industrial Park. The airport is critical for the tourist industry and businesses that depend on access to markets outside Vermont. This industry cluster also provides job growth opportunities for Burlington residents. The airport annually contributes over $240,000,000 in business sales and wages, generates tens of millions of dollars in personal income and employs over an estimated 2,900 people annually.

Single-occupancy vehicles remain a primary means of transportation to work. According to the 2000 Census, 62% of Burlington residents drive alone in their cars to work. Although census data is not available on non-resident commuters, many – if not most – of the roughly 20,000 non-residents who work in the City are driving alone to work. New and expanded road infrastructure is needed to support additional growth, including completion of the Southern Connector, North Street, and Riverside Avenue projects. In addition, additional downtown parking is needed, as identified in the Downtown Parking Study. The need for parking is growing faster than the weaning of drivers from our roads. If Burlington is to be both a center for living and tourism then this will increase over time.

The City acknowledges that automobiles remain a need for many low-income workers. The Good News Garage helps to fill this need, providing reconditioned vehicles to low and moderate-income folks – an essential link to jobs for many of them. Seventy-five percent of the Reach Up participants who bought cars through the Good News Garage are now working and have moved off welfare or had their benefits reduced.

At the same time, the City acknowledges the need to move away from reliance on single occupancy vehicles. The City needs to support alternatives to single occupancy vehicles – including: 1) an expanded PARC shuttle system; 2) supporting ride share and park & rides and 3) commuter rail. The Climate Protection Plan also outlines transportation opportunities for businesses and changes in transportation policy that could ease barriers for low-income workers while simultaneously reducing greenhouse gas emissions.

According to the 2000 Census, 3,500 residents – or 17% of the Burlington workforce – walk to work. (That represents over two-thirds of all county residents who walk to work.) Keeping sidewalks clear for pedestrians and making sidewalks handicapped accessible helps the handicap population access jobs and services as well as supporting the transportation means of a significant part of the workforce.

According to the 2000 Census, around 800 Burlington residents use public transportation to get to work. (That represents two-thirds of the county workforce using public transportation.) As discussed earlier, the local bus system – dependent on local property tax revenues from only five local participating municipalities – does not reach a number of significant job centers. The proposed Transportation Center will improve bus access to and from Burlington. Other improvements which are planned or underway include smaller, more energy-efficient buses and an Intelligent Transportation System to keep riders better informed about bus arrival times. However, further improvements to the public transportation system – including changes to financing mechanisms, analysis of and improvements to routes, more affordable fares for younger riders, Sunday service, and 2 new locations east and north of downtown for the PARC shuttle bus system – need to be explored.

Commuter rail has ended its service between Charlotte and Burlington. It may start back up when Shelburne Road starts construction later in 2005. The City believes that rail should be an important piece of regional transportation, and that commuter rail links between the City and other regional centers such as Essex and St. Albans should continue to be explored. In its place, CCTA has commenced a commuter bus that bridges Middlebury and Burlington with stops in Bristol, Vergennes, Ferrisburg, Charlotte, and Shelburne.

Transportation projects that are planned or underway include:

• Expansion and improvements to the Burlington Airport
• Construction of the Downtown Transit Center
• Planning for the South End Transit Center
• Planning for new parking capacity through new garages and additional decks
• Construction of the Champlain Parkway
• Construction of Riverside Avenue
• Construction of North Street improvements
• More integrated and smarter bus service
• Continuation of the commuter train
• Continuation of the Downtown PARC Program
• Continuation of the College Street Shuttle
• Continuation of the Two Hours of Free Parking
• Implementation of the Car Sharing program
• Additional bike lanes throughout Burlington

Educational Institutions and Workforce Training

The research capacity and resources of the University of Vermont (UVM) and other institutions of higher learning within the City can and do drive new business and job development. Recently, UVM purchased the former Trinity College Campus and plans to build a high technology incubator building there. Champlain College houses three institutes that are focused on assisting businesses. Champlain College just established a new Master of Science in Managing Innovation & Information Technology degree. Champlain plans to build several new buildings in the next few years. UVM has bonded for $120 million to upgrade its facilities.

Additionally, the purchasing power of the University and other major institutions within the City – Fletcher Allen Health Care, the City itself – can be directed to support businesses that will direct dollars to the local economy. The total amount of UVM purchases for fiscal year 2000 was around $136.4 million, with 56% purchased from 923 Vermont vendors. The University has worked with the City through the Community Outreach Partnership Center to target contracting opportunities (as well as employment opportunities) locally, and specifically to the Old North End area of Burlington.

The City’s economic development policy must consider who is in the untapped labor pool and what they need to enter the labor force. These needs vary dramatically from unskilled and untrained laborers to first time workers and recent high school graduates, to underemployed and unemployed professionals. Large numbers of unemployed and underemployed residents have significant skill deficits and barriers to employment that prevent them from successfully attaching to the workforce. The City must work with employers and service providers to help develop and support training programs that help the labor force better maneuver in a changing labor market. Educational institutions, service providers, and business need to be linked so that people are trained for the jobs of the future. Residents need lifelong learning, including computer literacy.

The City’s youth also need assistance to better prepare for entering the workforce. Youth need better job skills training. Although the current and projected future labor market makes entry-level jobs available, youth need the skills to sustain productive, satisfying work lives, as well as more mentoring opportunities. Linking Learning to Life (a program that grew out of an Enterprise Community strategy and that represents a partnership among educators, employers and community leaders) helps to build school-to-career opportunities, and should be sustained. The City needs to explore additional ways to target low-income youth who are dropping out of school. Additional options to traditional school programs – options that integrate work experience, education, community service and leadership development (such as the YouthBuild program now part of Recycle North) – should be explored.

Workers need easy access to information about training opportunities, apprenticeships and career options, as well as access to training for higher skilled jobs. More local control of and community input into job training programs using state and federal programs would make those programs more responsive to local needs.

Technology skills are a critical component to employment success for much of today’s workforce. Residents, and in particular homeless and low-income residents, need access to affordable training in these skills to be successful in the workplace.

Tech Academy

There are currently two technical academies in Chittenden County – one in Burlington and one in Essex, plus Vermont Technical College is located in Williston. The Burlington Technical Academy needs to improve its  facilities and programming. The City will continue to be a partner in the ongoing discussions about the location and financing of this project.

Equal Opportunity

Diversity and multi-culturalism within the City contribute to its vibrant environment and need to be fostered in the workplace, in the business community and in the community as a whole. People of color, refugees, immigrants, people with disabilities, gays and lesbians and women face barriers to equal opportunity which must be addressed – allowing them to fully participate in the City’s economic life, and allowing the City’s economy to benefit from their skills, energy, talents and business acumen.

There is a growing opportunity for creating new businesses in Burlington. The City should work with the Vermont Refugee Micro Enterprise Program, the Women’s Small Business Program, and Vocational Rehabilitation to help ensure economic opportunities for all entrepreneurs.