MANCHESTER — Empty storefronts in downtown Manchester have caught eyes and sparked conversation on social media, with some asking, “is this a harbinger for things to come?” According to those active in the local business and real estate industries, however, the town’s economic outlook is much brighter.
In recent months, locals have bemoaned the closure of establishments including Manchester Country Store and Deli, the Polo Ralph Lauren outlet store, The Pharmacy Northshire, and New Morning Natural Foods & Juicery – for various reasons.
“I get it,” said John Burnham, executive director of the Manchester Business Association (MBA). “I understand why people see something and think, ‘oh my gosh, yeah, the sky is falling,’ but it really isn't.”
Burnham contextualizes the recent closures as part of the natural ebb and flow of Manchester’s downtown landscape, which has consistently seen businesses come and go over the years. Long Ago and Far Away winds down as the owners retire, and Three Pear’s Gallery comes to Manchester (from neighboring Dorset) to fill the vacancy, for example. Some businesses simply relocate within town, as New Morning is currently working to do.
“We’re so excited to reopen our health food store and our rebranded juice bar in a fresh new space,” said co-owner Morgan Kelley, who says they are still finalizing the store’s new location. “This move gives us room to grow, get creative, and offer a more modern, personalized experience.”
For the stores that close their doors for good, however, a certain level of mourning is to be expected. In cases like the closure of The Pharmacy Northshire, important services can also be impacted.
“It's hard, right?” Burnham said. “We all fall in love with a particular store or a particular restaurant or a particular experience and, for whatever reason, that business or experience or shopping kind of goes away.”
NEW BUSINESS DEVELOPMENTS
That said, the recent closures are contrasted by a number of new business developments, including the recent sale of a property on Depot Street that was formerly owned by the town of Manchester. The buyer is Equinox Mountain Partners, a limited liability corporation led by local investor Clark French.
French said his plans for the 1.91 acre lot — encompassing 301, 321, and 341 Depot Street — are still being finalized, but he hinted that some new (and existing) businesses would be occupying the space.
“Given recent store closures affecting other local buildings, we are happy to confirm that J Crew will be staying in their current space for many more years, extending their long commitment to the Manchester community,” French said. “We are also nearing confirmation of three exciting new retail and boutique tenants which will add more vibrancy to Mountain Commons and the community.”
Construction also continues at two new ventures on Main Street. Lost Marble Brewing Company plans to open in the fall at 4519 Main Street, bringing an anticipated 20 new jobs to town with it.
Just across the roundabout at 4460 and 4478 Main Street, a new restaurant is in progress.
Additionally, developers tied to Mount Holly Beer Company also visited Manchester’s Development Review Board earlier this year to present preliminary plans for a mostly-vacant 16,907-square-foot property at 58 Depot Street, known colloquially as the “Crystal Palace.”
A few doors down, there’s yet another venture in the works. Local Maverick, described as “a curated retail experience to discover, shop, and experience the best of Vermont,” plans to open a new location at 96 Depot Street in June.
According to founder Ryan Nakhleh, the idea arose from his past work coordinating luxury ski experiences. With a presence in both Burlington and The Oculus World Trade Center in New York City, Local Maverick seeks to leverage “business as a force for good.”
“I thought, okay, can we utilize these types of business tactics and utilize partnerships and collaboration in addition to technology and create this seamless experience, but bring it to a local level?” Nakhleh explained.
By spotlighting Vermont brands, Nakhleh says that Local Maverick aims to help businesses address challenges like scalability and growth. Now, that mission is growing to encompass Southern Vermont – with Manchester at the forefront.
“We've been trying to figure out ways to expand across the state where we can open up these other community-based hubs that will make it easier for us to access and partner with businesses across the state,” he explained. “Manchester is a really exciting opportunity for us, because we love the community.”
“As more and more smaller and independent businesses start to come back into the community, as retail and business shifts away from outlets, we just feel like it's the perfect opportunity to come in,” Nakhleh continued. “Our goal with this new location is to uplift and showcase all the incredible businesses and makers and experiences that already make Manchester so special.”
Leaders from Vermont Flannel, which will soon share a building with Local Maverick, helped solidify the decision, according to Nakhleh. The Manchester location will also feature a tasting room from Split Spirits, a Vermont distillery led by Manchester’s own Will Drucker.
“We've been partnering with Split Spirits for the last few years on a number of initiatives,” Nakhleh explained. “And so that's another reason why Manchester has been kind of on our list.”
OPTION TAX REVENUE
Of course, there’s more to Manchester’s economic landscape than meets the eye. While store closures and openings might be most noticeable on the ground, Burnham points to local option tax revenue as a good gauge of the town’s economy.
Collected on a quarterly basis, option tax revenue is reported back to the town a little more than a month after each business quarter ends – meaning the next report is expected in early May. In Manchester, the revenue is derived from a 1 percent tax on retail sales, meals, and rooms.
Looking back to 2024 as a whole, Burnham said the town received $1.617 million in option tax revenue – an increase of approximately 3.6 percent from 2023. That total is just what came back to the town, he clarified, after approximately 30 percent of the total revenue is taken by the state.
“If things were going downhill, you wouldn't see an increase in option tax revenue,” Burnham said. “You see a business leave and you think it's bad news and things are going poorly, but the option tax revenue would not support that.”
“If you compare it to 2019, which I like to call the last normal year we've had prior to COVID, we saw an increase of over 31 percent,” he said. “So we're bringing in close to $400,000 more in option tax revenue in a calendar year than we did back in 2019.”
Another metric employed by the business association is traffic to the website ManchesterVermont.com, which promotes the town and some of the businesses and attractions within it.
“We saw about a four or five percent increase in traffic to our website year-over-year as well,” Burnham said. “We're just a little over 150,000 visitors to our website on an annual basis, and it's not just repeat visitors. It's a good chunk of new visitors, people who are discovering Manchester for the first time.”
LACK OF HOUSING
Challenges still remain for local businesses, however. While Manchester is not immune to national trends like rising costs – both for property and inventory or ingredients – Burnham said that a lack of housing for local workers is often cited as one of the biggest challenges for the MBA’s members.
“They have some great people that are looking to maybe move and fill positions and experience what we all love about the area,” he explained, “but they can't find a house to buy that's even remotely close to the price range they could afford, or they can't find a place to rent long term.”
A number of new developments have incorporated housing, which Burnham says is encouraging. The under-construction restaurant at 4460 and 4478 Main Street includes a four-bedroom apartment and a new three-bedroom home for example, while the proposed project at 58 Depot Street could also include housing components, according to draft plans presented to the DRB.
“Every chance we get to put more housing in and around the downtown area makes it an even more vibrant community,” Burnham affirmed.
According to developer Paul Carroccio, founder of TPW Real Estate, that level of integration between housing and retail is crucial to Manchester’s economic growth going forward.
“The fact of Vermont's housing ‘crisis’ is the fact that Vermont's ownership is not leveraged, and is not making their spaces available for housing units,” Carroccio said, citing a plethora of retail shops throughout the state with empty levels above. “We have an inordinate amount of vacant existing structures in Vermont that have spaces inside of them, or entire structures that are vacant.”
Affordability is one factor according to Carroccio, and a “low risk-tolerance” from Vermont property owners has amplified the situation.
“People really do want to be here. People really do want to rent the spaces and build a business, but it's unaffordable,” he said. “And then the other bigger problem is that the landlords that own the spaces don't want to do anything with them.”
Carroccio compares the number of vacancies to unemployment in that those not on the market are often not accounted for.
“That person who owns that second floor in Woodstock, Manchester, Rutland, Bennington, you name it – how do you get them to fix it up and make it an apartment that's clean and to code and safe and ready for someone to rent?” he asked.
The Journal spoke with Carroccio on the subject of retail closures and vacancies in 2017, when a nation-wide shuttering of malls and outlets reached downtown Manchester. Going “out on a limb,” Carroccio now estimates that retail vacancies in Manchester have reduced by approximately 70 percent since that time.
“We've leased three spaces in the last three weeks on Main Street to boutique shops and startup companies,” Carroccio said, adding that he feels optimistic overall about Manchester’s economic outlook.
“It's a resilient community of deep, deep, deep wealth and people that are proactive,” he said. “They manage their economics, they manage their resources, their education system – I mean, it's one of the more active communities in terms of staying on top of things.”
Both Carroccio and Burnham described Manchester’s shifting retail landscape as an “evolution” – one that spans from the town’s historic lumber and marble industries to the burgeoning arts scene at the turn of the century and forward through the advent of ski resorts, outlets, and everything in between.
“I don't think we're different from any other place around this country where the retail market has changed,” Burnham said. “It's just an evolution of what our town and community is all about.”