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The Upper Valley's Economic Upper Hand
Published Wednesday, February 14, 2018

Dartmouth-Hitchcock Medical Center in Lebanon. Courtesy photo.

Editor’s Note: This is part of a series highlighting economic development in various cities and regions.  

Powered by the dual engines of an ivy-league college and a renowned medical institution, the economy of the Upper Valley is proving as dynamic and dependable as the river that helps define it.

The region includes NH and Vermont towns flanking some 40 miles of the coursing, upper Connecticut River, which separates the two states, and is anchored by Dartmouth College in Hanover and Dartmouth-Hitchcock Medical Center in Lebanon, the area’s largest employers. But it is also home to numerous medical and high-tech firms that have spun off from the work at those institutions, precision manufacturers drawn to the cutting-edge climate, a burgeoning food industry, a thriving arts scene and recreational ventures that take advantage of the area’s natural beauty.

“It’s a very busy place,” says Anne Duncan Cooley, CEO of the Grafton Regional Development Corporation.

The Upper Valley comprises more than 40 towns in the two states, according to the Upper Valley Bi-State Regional Chamber of Commerce, and runs roughly from Cornish, NH and Windsor, Vermont in the south to Piermont, NH and Bradford, Vermont in the north. It is the base for such well-known companies as Hypertherm, Timken Aerospace, Novo Nordisk, Mascoma Corp. and Fuji Dimatix, as well as incubator spaces for up-and-coming medical, technology and manufacturing firms. But the hospital and college are its heartbeat.

The Dartmouth Hub
Dartmouth-Hitchcock is the largest employer in NH outside of government, employing nearly 10,000 workers. Dartmouth College, founded in 1769 and one of the nation’s most highly regarded educational institutions, employs 3,355 faculty and staff, according to its website.

Their presence spurs other businesses. “One of the big things that Dartmouth College has brought to bear is that is has two very famous graduate schools, the Thayer School of Engineering and the Tuck School of Business,” says Rob Taylor, executive director of the Lebanon Area Chamber of Commerce (the college is also home to the Geisel School of Medicine). “The influence of those two graduate schools has been large in the Upper Valley, creating spin-offs. People like the area and the proximity to the college and spin off into their own startups.”

Students in class at the Thayer School of Engineering at Dartmouth College. Courtesy photo.

Hanover-based Hypertherm is an example. The company chose to locate in the Upper Valley “because of Dartmouth and its strong engineering community,” says Michelle Avila, communications manager for the firm.

She says that the company’s founder, Dick Couch, attended the Thayer School of Engineering in the late 60s, went to work at a Hanover engineering services firm, Creare, and with a former professor, Bob Dean, “discovered that by radially injecting water into a plasma-cutting nozzle, they could create a narrower arc, capable of cutting metal with a speed and accuracy never before seen.” That led to the creation of Hypertherm, which has not only been recognized for its industry leadership in cutting products but for its eco-friendly practices and its workplace culture, including being employee owned.

Centerra Resource Park, across Route 120 from the Dartmouth-Hitchcock Medical Center, hosts offices, retail shops, small businesses and the Dartmouth Regional Technology Center (DRTC), a nonprofit formed in 2004 as a mixed-use technology incubator to foster startups. “It’s like the Silicon Valley just dropped into New Hampshire,” Cooley says of the tech center.

U.S. Sen. Maggie Hassan with Trip Davis, CEO of FreshAir Sensor and chairman of the board for the Dartmouth Regional Technology Center. Courtesy photo.

The center has been so successful that it has expanded twice since launching in 2006 and its 60,500 square feet of office and laboratory space now houses 19 tenants, ranging from a medical imaging company to a firm specializing in ways to improve safety in contact sports.

Dartmouth College, the Grafton Regional Development Corporation and North Country Council govern the center, which was built with $10 million in grants from the U.S. Economic Development Administration and the NH Community Development Finance Authority on land donated by Dartmouth.

The relationship the tech center has with Dartmouth and Dartmouth-Hitchcock is “absolutely critical,” says Trip Davis, chairman of the board for the center. “Every single one of our tenants in one way, shape or form has some type of affinity or relationship or maybe even a contract with Dartmouth or DHMC. Most have some sort of [intellectual] property or research started in DHMC or a Dartmouth lab, and when they reach a certain stage, they legally need to get out and start their own for-profit stage.”

That, he says, is where the tech center comes in, providing phone, internet, utilities, wet labs and flexible space independent of any municipality or university. “It all comes back to that flexibility for the tenant,” says Davis. “We don’t want to have to go through a bureaucratic process or an RFP every time we want to change a light bulb.”

Diverse Businesses
But spin-offs and startups aren’t the only businesses bolstered by locating in the Upper Valley. “You have an economy that flourishes surrounding the hospital – stores, restaurants,” says Taylor at the Lebanon Area Chamber of Commerce. “Twenty-five-thousand to 30,000 cars are going down Route 120 every day. The shopping district in West Lebanon has flourished because of its proximity to the hospital and to Vermont because of tax-free shopping. There are big box stores. It’s our retail hub for the region.”

Other businesses thriving in the region have no relation to either the hospital or college. “We’ve found in this region that we have a very healthy economic engine going here largely driven by the college and the hospital but not exclusively,” says Hanover Town Manager Julia Griffin. “It’s partly driven by people who are drawn to this area because their product is comfortable in an academic or hospital sphere…. As a municipal manager, I always want to be careful not to be overly confident in one economic driver because that can go south and potentially have devastating consequences. Looking for diversity is important.”

Tracy Hutchins, executive director of the Hanover Chamber of Commerce, agrees. “I guess you could say our economy is dominated by the larger employers, but there are lots of small and percolating businesses that are growing and thriving,” she says.

She mentions the U.S. Army Corps of Engineers Cold Regions Research and Engineering Laboratory (CRREL), based in Hanover, which conducts cutting-edge research on how machinery and other objects perform in cold areas and which has a technical staff of 110.

Dr. Chris Polashenski, research geophysicist, explains some of the research solutions his team uses to members of the National Guard’s Arctic Interest Council at the U.S. Army Cold Regions Research and Engineering Laboratory in Hanover. Photo by Bryan Armbrust.

Claremont’s Growing Economy
In Claremont, three towns away from Lebanon, the influence of the hospital and college is not as strong, but that hasn’t held back growth, according to Nancy Merrill, Claremont director of planning and development.

North Country Smokehouse ribbon cutting in Claremont. Courtesy photo.

Within the past year in Claremont, the North Country Smokehouse has built a new 67,000-square-foot facility, and mortgage servicing firm National Field Representatives added 24,000 square feet, she says. In January, New Hampshire Industries moved from Lebanon to a 130,000-square-foot facility in Claremont. And an 11,000-square-foot “makerspace” in a former mill building is now under construction in the downtown area.

Employees at New Hampshire Industries, which recently moved from Lebanon to Claremont. Photo courtesy of the City of Claremont.

A Stable Region
Thanks largely to the hospital and college, the economy of the area has remained relatively stable, even during downturns.

Bruce DeMay, director of NH’s Economic and Labor Market Information Bureau, says his agency has found that during a recession like the one that hit the country in 2007-2009, “there were very few sectors that did not lose employment but continued to gain. The education sector was one, the health care sector was another.” Because the Upper Valley has both, he adds, “they probably fared better during the recession than other areas of the state.”

Griffin agrees. “When I was city manager in Concord, the Upper Valley region got through the last recession pretty well compared to Concord, in part because the hospital and college were recession-proof,” she says.

Steve Schneider, executive director of the Upper Valley Lake Sunapee Regional Planning Commission, notes that “in the worst of the recession our unemployment rate up here probably didn’t crack 6 or 7 percent. It was a stable place.”

Says Taylor, “The presence of the college and hospital tends to insulate us from swings in the economy because people need health care even if the economy is poor. Dartmouth College with their endowment, they don’t really feel the pain if there’s a downturn, either.” Dartmouth’s endowment now stands at an all-time high of $4.96 billion, according to the school’s office of communications.

Infrastructure is a key part of the region’s draw. The Upper Valley is supported by a commercial airport in Lebanon, interstate highways 89 and 91, as well as bus and rail service. Multiple bridges connect NH and Vermont across the Connecticut River.

“There are tremendous transportation resources in terms of highway and an airport with service to Boston and New York,” says Taylor. “If you take the twin states, we’re smack in the middle. There’s easy access to southern parts of New Hampshire and northern parts of Vermont. We’ve seen some companies coming just because of proximity to the highways to get products to New England markets in quick and easy fashion.”

That’s good news for another rising industry in the region—food.

A Local Flavor
Says Hanover Town Manager Griffin, “One thing that’s really neat about this part of the state, and we have to give credit to Vermont, they’re very supportive of the buy-local, eat-local movement. We have lots of agricultural endeavors on both sides of the river and a lot of food enterprises growing out of that stay-local culture.”

The Hanover Co-op Food Store chain has been growing since residents of Hanover and Norwich, Vt. formed the Hanover Consumer’s Club in 1936. Today, it has stores in Hanover, Lebanon and White River Junction, Vt., serving more than 20,000 households, employing about 400 people and sales topping $70 million, according to its website. “In an area where there wasn’t much good food and decent shopping up here, a bunch of people got together and created kind of a Whole Foods place but with local food,” Cooley says of its success.

That’s no surprise in a region where “we still have a rich agricultural community, which is not as prevalent further south,” says Taylor, noting the number of farms found along the Connecticut River, as well as inland.

There is also the popular, 15-year-old Lebanon Farmers Market, open Thursdays throughout the summer, with additional winter hours. “It’s a scene, just bustling with people and kids and pets and food,” says Taylor. “It’s something people from the area recognize as a treasure for us. It’s one of the best in the state.”

The Lebanon Farmers Market. Courtesy photo.

Among other foodie success stories in the region is Red Kite Candy, based in Bradford, Vt., which sells caramels, nougats, toffee, bark and other treats. What started in a basement has grown and is now housed in a commercial facility.

Restaurants and specialty food stores are thriving in Hanover, according to Griffin, in part because of the demand from college students and visiting relatives. Umpleby’s Bakery and Cafe, for example, was established in Vermont in 2000 but in late 2007 moved to Hanover, where baker Charles Umpleby and his wife, Carolyn, aspire to maintain a “bakery utopia.”

Griffin sees plenty of growth potential for the industry. “There are so many food-based businesses that have really taken off that our biggest challenge is figuring out how to develop some food-related incubator space,” she says. “There is increasing demand and interest in creating a community commercial kitchen facility to provide for home-based food businesses, because they need a place to go when they’ve outgrown their home-based kitchen and their product is growing. You see a tremendous amount of interest in take-home and locally–sourced food. The dilemma is, how do we launch them?”

Nature and Culture
Arts and recreation are additional economic drivers, as the Upper Valley boasts multiple museums, sculpture gardens and performance venues in most, but not all, the major cities.

Lebanon alone features the AVA (Alliance for the Visual Arts) Gallery, Upper Valley Music Center and Lebanon Opera House, among other attractions. In Hanover, Dartmouth’s campus is home to the Hopkins Center, a major performance venue, as well as the Hood Museum of Art.

 “Hairspray, The Broadway Musical” on The Moore Theater stage in the Hopkins Center. Courtesy photo.

Nearby smaller towns offer a variety of festivals, fairs and points of interest. Cornish, for example, draws art and nature lovers to the 195-acre Saint-Gaudens National Historic Site, which features more than 100 works by the late sculptor, who lived on the grounds. The town was also home to the painter Maxfield Parrish and writer J.D. Salinger before their deaths.

Saint-Gaudens National Historic Site in Cornish. Courtesy of the NH Division of Historical Resources.

Driving through the region it isn’t hard to see why artists were inspired here. “It’s still a very rural area,” Taylor says of the Upper Valley. “It has a great scenic quality and beauty, with lots of recreational opportunities, winter to summer, like skiing, biking and snowshoeing.”

Adds Griffin, “We’re seeing a certain kind of individual attracted to this region or become interested in fitness once they get here. When it comes to outfitters, tour leaders, you’ve got a fair amount of potential in teaching people to fly fish, mountain biking, Nordic skiing.”

Facing Challenges
With all of its attractions and successes, however, the Upper Valley has its challenges, many of them universal to the times.

Hutchins at the Hanover Chamber of Commerce says she has heard concerns about the changing mix of businesses in downtown Hanover, with less emphasis on retail and more on restaurants, which is largely due to the prevalence of online shopping. “The nature of retail is changing everywhere, not just in the Upper Valley,” she says. “You can buy something off Amazon at midnight in your pajamas versus coming downtown.”

Nevertheless, “though there’s concern about less retail, we have a wonderful mix of types of shops,” she adds.

Merrill, the Claremont planner, sees another challenge that extends beyond the borders of the Upper Valley—workforce. “We need workers in this region. Everybody is hiring,” she says. “We need people to take some of these positions and move into the area. It’s a great position to be in, and very different from ’09, when we were at the opposite end of the spectrum. The conversation has certainly shifted.”

She points to such efforts as Whelen Engineering in Charlestown partnering with Sugar River Technical High School to train students in needed skills as one step toward solving the problem.

Most see continued success for the Upper Valley. “Because of the college and the hospital, this region will continue to see innovation, outshoots from health care or research at the college. That will continue,” says Schneider at the Upper Valley Lake Sunapee Regional Planning Commission.

Adds Griffin, “We’ve got a lot going on up here in this little corner of the state.”

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