Regional Recovery Advisory Group

Bucksport Meeting

March 5, 2015

Attendance:

Andy Hamilton, Eaton Peabody, Chair / Alaina Scheuchzer, Maine Maritime Academy
Brian Simpson, EMDC / Carol Woodcock, Senator Collins’ office
Christopher Winstead, Piscataquis County Economic Development Corporation / David Milan, Town of Bucksport
Derik Gooding, Town of Bucksport / Don Houghton, Bucksport Enterprise
Donald Maier, Maine Maritime Academy / Evan Richert, Town of Orono/BRDA
Hook Wheeler, EMDC / Jen Brooks, EMDC
Jon Farley, EMDC / Justin Davis, Senator Collins’ office
Kevin Gregory, EMDC / Mark Kontio, Rep Poliquin’s office
Michael Aube, EMDC / Ralph Harvey, Searsport
Scott Wilkinson, Senator King’s office / Stephen Stanley, Maine State Representative
Tom Fernands, EMDC / Tyler Collins, EMDC
Vicki Rusbult, EMDC

Andy Hamilton, Advisory Committee Chair, started the committee meeting with introductions of participants. He emphasized that attendees should invite business members that they identify as interested parties to future committee meetings to assure that we have their voices in the conversations. He noted that we want to be sure and consider each community’s traditions but are looking for new opportunities that are emerging.

Michael Aube provided an update on activities through the EDA-funded grant. There are 3 points of focus – supply chain analysis, workforce analysis, and business interviews; more than 100 interviews are planned by EMDC, stakeholders and Camoin Associates. Rounding out these activities will be our continued engagement of congressional office staff, stakeholders, and learning from sector consultants invited to speak to the group. This will be our opportunity to look at current economic conditions, evaluate challenges, and identify opportunities. Our goal is to not just look at the reuse of closed facilities or reuse of the mills, but rather to look at the bigger picture including independent opportunities emerging and weak signals. Camoin Associates will work to build and complement the work of BRDA, Charlie Colgan/University of Southern Maine, and others.

Our plan for future advisory committee meetings is to invite 10-12 economists/professional networks familiar with this region’s economic climate, assets, and challenges. These economists will be invited to review the final product in mid-May and provide input – Did we hit the mark? Their input on the resulting action and development of a strategic focus will be important.

Meetings to bring the legislative delegation into the process will be important for interagency investment (people and financial support). The scheduling of these meetings is underway.

Evan Richert, Orono Town Planner, gave an overview of his presentation “Uncovering the Bangor Region’s Competitive Economic Sectors.” This research was sponsored by the Bangor Region Development Alliance (BRDA) in response to the findings and recommendations by Charles Colgan who was previously with the University of Southern Maine. He noted that Bangor’s greatest strengths are selling to non-residents within the region and recirculating dollars within the region. He provided a review of specialization ratio thatcompares how strongly a region performs compared to how dependent or specialized a larger region is (state, region, US). If the ratio is greater than 1, it implies that one has a competitive advantage as well as significant net exporting (little leakage). The regions strengths are within the following categories: higher education; health services; and, comparison goods retail stores. Weaker but moving fast strengths include arts/entertainment sectors, travel accommodations, and food service.

For example, when viewed from outside, the Bangor metro area is not known as a specialization center (no depth of manufacturing, professional services or technical services). However, the region is viewed as a service hub including media and transportation. Although these services have declined with the recent recession, it is thought that this decline is cyclical; further investigation is needed.

Of note, once one digs deeper into the data, it becomes clear that more is going on and patterns begin to emerge. The results identify numerous sub-sectors that are potentially growing – manufacturing, forestry support activities, specialty construction trades, long-distance freight trucking, and contract telemarketing and administrative services.

Complimenting this research, Camoin is looking beyond obvious trends to identify emerging businesses/weak signals:

  • Forestry and mapping
  • Construction
  • Energy
  • Administrative and support services

The question became - can we trace these export sectors back to regional competitive advantages? Additional mine mapping was performed to identify advantages through our proximity to the Northern Forest (unique vs world and hard to duplicate), proximity to the Gulf of Maine, transportation infrastructure (there is still clear need but we think this is an advantage), our outdoor recreational brand, center for higher education center/flagship university, and a strong heritage of skilled artisan workforce (innovative and inventive).

Evan reviewed slides which showed how strong and resilient the sectors appear; the denser the network, the stronger the network is for growth and longevity. For the next step, EMDC/BRDA/MEM/Chamber areplanning to convene several roundtables to discuss the different sectors of opportunity. However, the group has decided to defer this action for now and combine their work with this projects’ efforts including roundtable discussions after more data is collected.

Evan concluded his presentation by recommending that Camoin Associates focus on these identified sectors including transportation as well as ones that might have been missed. In addition, it was felt that industries experiencing a downturn should be interviewed to ask what caused the downturn, and whether the decline is cyclical or structural.

Professors Donald Maier and Alaina Scheuchzer from the Maine Maritime Academy (MMA) reviewed the results of a graduate level research project performed in 2012 on behalf of EMDC and Mobilize Eastern Maine to examine logistics and infrastructure in this region. For the purpose of this study a basic definition of logistics was employed -- managing the flow of inventory, information and cash. The analysis was broken down as follows:

  • Industry sectors and proximity to markets (how are goods being utilized?)
  • Interstate congestion (going to get more congested with additional products moving up and down)
  • Strengths: Location, developmental infancy – lots of land available to build on, diverse modes, free trade zone
  • Weaknesses: Removed from arterial transport infrastructure, limited capabilities, limited customer base and exposure, small industry base, fragmented interest within the corridor
  • Threats: Need to get transportation players to get together and work collaboratively instead of competing, community concerns, competition/established ports of Portland, Searsport, Eastport – fragmented and trying to do same thing competitively
  • Opportunities: Location (congestion in other ports/airports along Eastern seaboard; increased trade with Europe & Middle East [don’t have enough resources to power production needs and wanting to reduce by 20% emissions]); available undeveloped land; job creation & economic growth

When looking at Bucksport, obvious strengths are the existing infrastructure although there is the risk of losing rail access with the mill closure. The presenters pointed out that weaknesses are not as poignant as in other areas if Bucksport works to convert opportunities. Of note, they noted that once you lose thatidentify as an industrial area, it’s hard to get that back.

Bucksport’s weak link is rail; it has not been upgraded for a long time and time to transport (5 miles per hour) is lengthy (for example it takes 9 days to move from Jay to Bucksport).

A discussion followed about what the process would look like to make Bucksport an efficient port and the necessary logistics. It was recommended that we establish a corridor committee, select a Champion spokesperson, develop a strategic vision, foster a brand image;, and facilitate consolidation and collaboration. The committee would be charged with working collaboratively to plan and optimize a potential investment in rail connection and to identify customers to support this investment.

Improving rail connections requires structuralimprovements and would need an agreement of increased business. The issue is how do you get businesses interested? The rail historically supported service from Bucksport to Detroit. There would need to be business density to increase rail to return to that level of service. Communities would need to pull together and strategize for a group and regional approach. Having one blended voice would be harder to ignore and eliminate the internal competition. The community and region needs to identify and understand the needs of each and then consolidate those needs into one vision. It was noted that to get rail up to 30 mph, an investment of $1.5 million of new track per mile would be needed. Attention to rail connections is critical. An east to west rail could suffer if we don’t educate communities about benefits –sometimes economic distress can present opportunities

MMA presenters also recommended that there be a facilitated collaboration between shippers and logistics providers to support a more detailed assessment. Again, the key is to bring everyone to same level so that all can compete at global level.

It was pointed out that there are three free trade zones in Maine – Brunswick, Bangor airport, and Waterville. There should also be a mechanism in place to create a Bucksport satellite for expanded free trade zone – form a new zone to create conditions for opportunity. Bucksport is in a good position and the town can show linkage to opportunities.

The presentation concluded with attention to the issues this region faces:

What does Maine lack?

  • Infrastructure (north-south only)
  • Class I rail interest
  • Strong industrial base
  • Strong community support for business
  • Clear image of Maine
  • Developers and banks at the table

What does Maine have?

  • Deep water ports
  • Closest airport to Europe with highest tarmac capacity
  • No congestion (time = money)
  • If other areas are congested, determine what our niche is and focus on that

The Advisory Committee then discussed how Bucksport can get their assets working well. Again, it was recommended that Bucksport collaborate with other communities so that Bucksport assets can work well for other communities. Bucksport is a logical point for a logistics center (and a better point for north-south rail), particularly with the opportunity to transport by water. Although efforts need to move carefully, it was agreed that opportunities need to be advanced quickly. Searsport is the only port in this region with double-stack capacity. Overpasses and bridges are a restricting factor for double stacks. If there isn’t capacity, shipper costs double. Finally, there was discussion about how Bucksport can repurpose the mill space – what are Bucksport’s unique assets and how can they benefit from them? Dave Milan pointed out that the mill owns water rights for three lakes in the vicinity. In addition, Bucksport would be an ideal location for ships to refuel. It was suggested that a capstone project with MMA graduate students be considered to look at Bucksport logistics.

Because of their expertise with logistics, MMA was also asked to continue their participation with this group to help further logistics discussions and plan work to move to implementation. Don and Alaina agreed to continue having MMA representation with this group. It also makes sense to reach out to Nate Moulten (MaineDOT) and invite him to future meetings.

It has become clear that there is a need to merge niche discussions for small businesses. Small businesses are isolated and not talking to other businesses about shared needs. Andy pointed out that Mobilize Eastern Maine would be a good vehicle to bring interested parties together. Although Hinckley Yachts not discussed, Andy noted that there is considerable enthusiasm about the level of business they see; there might be a possible connection for that business with Bucksport (dock boats at Bucksport for viewing).

The meeting closed with a reminder from Vicki that the next meeting will be Thursday, March 12, 2015 at 2pm in Bangor/Brewer. Notification of the actual site will be emailed shortly. Notes from this meeting will be posted on the Re-Engineering the Region web site under News & Updates. Attendees were encouraged to forward any resources, news stories, or data for posting on this site.